Willy Wo-Lap Lam
Xi has sought to take full advantage of these “big changes that only come once in a century” (百年未有之大变局),or the “best opportunity in 100 years,” as a primary foreign policy goal since attaining “party core” status at the 19th Party Congress in 2017. More than five years ago, he indicated that the Chinese leadership was “facing the biggest changes [on the global scene] not seen in the past century.” The President and Chinese Communist Party (CCP) General Secretary explained that since the dawn of the 21st century, “a large number of countries with newly developed markets … are growing at an expedited pace.” Moreover, Xi added that “the multi-polarization of the world is developing rapidly, and the global distribution of power has become more balanced by the day,” and that “the currents and major trends of the world cannot be negated” (Netease, January 14, 2022; Sohu.com, January 19, 2018). This viewpoint was buttressed by Xi’s revival of one of his favorite Chairman Mao quotations: “The East is rising and the West is declining” (People’s Daily, November 24, 2022; Radio Free Asia, September 23, 2022).
Xi urged party cadres and comrades to “develop a strategic outlook and establish a global point of view.” He stressed that “while being conscious of the historical opportunity, we must assiduously fix our direction in accordance with once-in-a-century opportunities.” The supreme leader, who heads the CCP’s China’s policy-setting Central Foreign Affairs Commission as well as the Central Military Commission, also indicated that “never have the world’s [developing] countries’ been so united [in the quest] for equal economic opportunities and for a say in global rule-setting” (Qstheory.cn, August 27, 2021; Gov.cn, December 28, 2017). This touches on a related theme in Xi’s style of international diplomacy, which is working to forge a “universe with a common destiny,” particularly with countries barred by the U.S.-led Western coalition from playing a significant role in global affairs (Xinhua, September 3, 2018).
Now that Xi has consolidated near-absolute power coming out of the 20th Party Congress last October and is effectively “leader for life,” he has lost no time in seeking to bring about a “new world order” that would displace that ushered in by the U.S. and its Western allies following World War II. Since last autumn, the supreme leader has been left, right and center on the world stage. The objective is to battle the so-called anti-China containment policy pursued by Washington, most NATO and EU countries, as well as U.S. allies in Asia, including Japan, South Korea and Australia. Hence, the Xi leadership has resorted to a two-pronged strategy. The first element of this approach, is seeking to drive a wedge between the U.S. and its allies, particularly individual EU countries whose questioning of American leadership would undermine the “anti-China” alliance. The second effort is to claim leadership of the new world order by forming China-centric blocs and alliances by offering generous help to developing nations in Asia, Central Asia and Africa.
Driving a Wedge Between the U.S. and its Allies
Xi’s tactics to divide the EU and the U.S. seem to have attained a level of beneficial results among individual European countries. During his visit to Beijing in the company of 40 top French business executives, French president Emmanuel Macron cautioned fellow European countries against becoming a “vassal” of the U.S. by embracing American standards at the expense of Europe’s own “strategic autonomy” (China Daily, April 13). On the issue of the Taiwan Strait and other flashpoints in Asia, Macron reportedly said that Europe “should not be caught up in a disordering of the world and crises that are not ours.” He added that Paris did not favor “a bloc versus bloc logic” (VOA Chinese, April 13; Deutsche Welle Chinese, April 12).
While business moguls from several powerful export-oriented countries, including France and Germany, are focused on revitalizing economic ties with the PRC, other senior European officials have warned against the efforts by China and Russia to dismantle the Western order. German Foreign Minister Annalena Baerbach adopted a much harsher attitude toward China. In contrast to Macron, Baerbach told Xi during her visit to Beijing last month that a war with Taiwan would affect the whole world. “The shock wave of such a world economic crisis would also hit China and Germany as special trading nations,” Baerbach said. As a result, she stressed that “we are therefore watching the increasing tensions in the Taiwan Strait with great concern” (VOA Chinese, April 20; Political.eu, April 14). In his visit to Japan and South Korea early this year, NATO Secretary-General Jens Stoltenberg pledged solidarity with the two American allies and indicated that NATO would come to their aid in the event of irresponsible efforts by other countries to change Asia’s status quo (NATO, January 30). NATO’s involvement in Asian affairs is a direct challenge to Xi’s warnings about the formation of a so-called Asian NATO.
Longstanding efforts by Beijing to use trade and economic inducements to divide the EU from the U.S. are not working very well because most European countries, particularly those that share borders with the USSR and Ukraine, are against the indirect yet clear-cut support that Beijing is offering Moscow in its invasion of Ukraine. Top leaders such as EU President Ursula von der Leyen have repeatedly warned President Xi over deteriorating human rights conditions within China, as well as Beijing’s support for Russia’s Ukraine campaign. She indicated after visiting the PRC in April that Europe must adopt a “unified strategy” toward the Asian giant. “China has now turned the page on the era of ‘reform and opening’ and is moving into a new era of security and control,” von der Leyen told EU lawmakers (Deutsche Welle Chinese, April 14; Ec-Europa.eu, March 30). Despite the so-called “smile diplomacy” that Xi has lavished on French and German businesspeople, the much-delayed EU-China Comprehensive Agreement on Investment and related trading protocols remain in limbo. Several Central and Eastern European countries have also indicated that they might pull out of infrastructure schemes formulated with Beijing under the Belt and Road Initiative (Deutsche Welle, January 3). [1]
Beijing’s efforts to persuade its neighbors—not only American allies such as Japan and South Korea but also the relatively neutral members of ASEAN—to choose China over the U.S. have arguably proven even less successful. The recent reconciliation between South Korea and Japan over World War II-related grievances was due to Seoul’s need to work closely with both the U.S. and Japan in order to deal with North Korea and China. The U.S. has made headway in boosting defense relations with Australia, Vietnam and the Philippines. Vietnam has taken its own initiative in forming defense pacts with countries including India, Japan and Australia to counter China. Manila has offered more bases to the U.S. military to be used in the event of a war (The Diplomat, April 19; Deutsche Welle, April 3; Kyodo News, March 27).
China-centric Bloc Building
The Xi Jinping leadership has spearheaded the formation of large, cross-continental trade and security blocs that testify to the PRC’s growing global clout. The biggest push on the economic front is the establishment of one of the largest trading blocs in the world, the Regional Comprehensive Economic Partnership (RCEP), which incorporates the ten ASEAN members as well as China, Japan, South Korea, Australia and New Zealand. The RCEP is also perceived as a counterweight to the Western-dominated Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is a free trade pact among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the U.K. and Vietnam. Although the U.S. has not yet joined the CPTPP, it was the pioneer of the prototype of the CPTPP, the Transpacific Pact (IMF, November 23, 2021).
Xi has also leveraged the PRC’s close ties with Russia and several Central and South Asian countries in order to expand the Shanghai Cooperation Organization (SCO) to include Pakistan, India and Iran, in addition to China, Russia and the four Central Asian member states. Several non-democratic countries, including Afghanistan, possess “observer status.” Moreover, Belarus, Sri Lanka, Turkey, Azerbaijan, Egypt, Saudi Arabia, Qatar, Armenia, Cambodia and Nepal have become “dialogue partners” of the SCO (Rfi, March 19; Sectsco.org, January 10). This potential “axis of autocratic states,” however, has internal problems such as the hidden rivalry between China and Russia, and the animosity between members such as Uzbekistan and Tajikistan, as well as India and Pakistan. Yet another trans-continental network, at least partially initiated by China and Russia is the BRICS bloc. Apart from Brazil, India and South Africa, Beijing and Moscow also want to recruit new members including Algeria, Argentina, Iran, Saudi Arabia, Turkey, Egypt and Afghanistan. BRICS has so far opposed sanctions levied by the UN on Iran, North Korea and Myanmar; while also maintaining an ambiguous or even permissive attitude toward Russia’s war with Ukraine, as well as Chinese support for Moscow (China Brief, March 17).
Despite the longstanding reliance of Saudi Arabia and other leading Arab states on strong defense ties with the U.S., the push by Beijing to forge a Sino-centric bloc appears to have fared particularly well in the Middle East. After Xi’s visit to Riyadh last December, around $30 billion worth of business deals were signed in the course of the consolidation of the PRC’s “comprehensive strategic partnership” with the Kingdom. Xi regards Saudi Arabia as an “important force in the multilateral world” (Xinhua, April 18; Rfi, December 14, 2022). China also brokered a historic rapprochement between Riyadh and Tehran. The representatives of China, Saudi Arabia and Iran met in Beijing in March to proclaim a breakthrough agreement to restore official relations (FMPRC, March 10). Chinese diplomats also seemed heavily involved in the recent détente between Syria and Saudi Arabia. The PRC has also recently sought to play the role of mediator between Qatar and Bahrain and between Turkey and Egypt (Asia Times, April 20; Australian Institute of International Affairs, April 14).
Yet another diplomatic move by Beijing that has much to do with attacking the global leadership position of the U.S. is challenging “dollar diplomacy.” The Xi administration scored a minor victory when, late last year, the Chinese apparently got permission to settle a part of their purchase of oil from Saudi Arabia in renminbi. Beijing is now eyeing Latin America in the U.S.’s own hemisphere. Diplomatic sources quoted by the Hong Kong newspaper Ming Pao said the CCP leadership is trying to reach some kind of trade and currency deal with the Mercosur Group, which comprises Argentina, Brazil, Paraguay and Uruguay. This was discussed during Brazilian President Luis Lula da Silva’s mid-April visit to China, during which 14 bilateral agreements on economic cooperation were signed. Lula also expressed his support for the PRC’s stances on Ukraine and Taiwan (People’s Daily, April 15; Japan Times, April 15). Further development regarding a free trade agreement and a protocol on the use of the renminbi as a trading currency between China and the Mercosur Group was discussed during the five-day visit to China by Uruguayan Foreign Minister Francisco Bonasso beginning April 16. Bonasso and his Chinese counterpart Qin Gang celebrated their “mature and stable” strategic partnership, which, they said, would be raised to a new level (Ming Pao, April 20; CGTN.com, April 18; FMPRC, April 14).
Conclusion: Will Xi’s “Once in a Century” Gambit Succeed?
At a time when China itself is running short of hard currency such as the U.S. dollar, it is doubtful that the Xi administration can sustain its campaign to woo the developing world through generous loans. By the end of 2021, the use of the renminbi in global trade in goods and services had shot up to 2.7 percent. Yet the proportion of world commerce transacted in U.S. dollars still remains close to 90 percent (BIS.org, December 5, 2022; Gov.cn, September 9, 2022). Given several negative factors, including rigid PRC control over foreign currency movements, Beijing still has a long way to go in its apparent effort to promote renminbi internationalization in order to bolster its role as a global finance role-setter.
A number of severe problems imperil Xi’s no-holds-barred efforts to compete with the U.S. and its allies. The first issue is financial, specifically, a lack of cash. Chinese investment in the Belt and Road Initiative (BRI), a key means to win the hearts and minds of developing countries, has dropped dramatically in the past five years. According to the Council on Foreign Relations, China has already spent some $1 trillion on the BRI. [1] If all the plans and pledges made by Beijing regarding the BRI were to be realized, the CCP administration may have to spend a total of $8 trillion At least in theory, China has lent out $500 billion to countries ranging from Sri Lanka and Pakistan to Venezuela and Greece. Yet China itself is saddled with $2.7 trillion of foreign debt. The relatively poor state of the PRC economy would seem to militate against the Xi leadership’s long-standing strategy of using financial dispensations to gain the favor of developing countries and to form “anti-Western” blocs among them.
Xi’s perhaps excessively optimistic projection about the rise of China and the decline of the Western order can be compared to the much more realistic and perspicacious observation of Li Hongzhang (1823-1901), one of the Qing Dynasty’s brightest and most modern-minded officials. Li said in 1883 that China was facing “changes that had not occurred in a few thousand years.” The master minister-diplomat was referring to the fact that while the Middle Kingdom had dominated the civilized world for more than a thousand years, the precipitous collapse of Chinese moral, economic and military leadership in the face of challenges from one colonizer after another had not happened in thousands of years. While the reasoning underpinning Xi’s great leap outward is “the East is rising and the West is declining,” Li’s advice to the Qing court and intellectuals was to undertake genuine, Westernized reform such as the establishment of modern universities and military forces. By contrast, the Xi leadership has rolled back market reforms and reembraced the centralized dictatorship typical of dynastic China.
Despite the lifting of the three-year zero-COVID policy and its lockdowns, the Chinese economy is perceived as failing to take the bold steps needed to revive Deng Xiaoping’s open-door policy. After all, the “wolf warrior” diplomacy essential to China reclaiming its Middle Kingdom status, which has been lost for more than a century, requires superior standards of technology and defense as well as dishing out economic benefits to developing nations. The fact that Chinese administrations of all levels are overleveraged and the government cannot even pay its civil servants or provide basic medical welfare for the elderly runs counter to paramount leader Xi’s determination to exploit “the opportunity of the century.”
Dr. Willy Wo-Lap Lam is a Senior Fellow at The Jamestown Foundation and a regular contributor to China Brief. He is an Adjunct Professor in the History Department and Master’s Program in Global Political Economy at the Chinese University of Hong Kong. He is the author of six books on China, including Chinese Politics in the Era of Xi Jinping (2015). His latest book, The Fight for China’s Future, was released by Routledge Publishing in 2020.
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