China: potential winner of the new economic Cold War - Muhammad Zamir (Bangla-Desh)

New facets of China's foreign and economic policies

Muhammad Zamir
The Financial Express Bangla-Desh : 25 Sep 2016
 

China is seeking to create a new model in its relations with certain countries. It is attempting to achieve this through a foreign policy that reflects the reality of China's economic rise.
Since September 2015 they have tried to create a positive construct pertaining to their relationship with the United States. In this context one is reminded of the comment made by former President Nixon as he set out in 1972 for Beijing hoping to end two decades of enmity. He observed that "China and the United States have had great differences. We will have differences in the future, but what we must do is to find a way to see that we can have differences without being enemies in war."
 Last year saw Chinese President Xi Jinping going for his first state visit to the United States, at a time when the stakes have become even higher within the paradigm of the bilateral relationship of these two countries.
Despite the brinkmanship between the two countries on a wide range of subjects - cyber hacking and contested atolls - both now realise that they need inter-active engagement to properly manage their differences. In this context one is reminded of the blunt warnings issued by President Obama in the second half of 2015 on cyber hacking: "There comes a point at which we consider this a core national security threat… we can choose to make this an area of competition, which I guarantee you we'll win if we have to." BBC later reported that only a scrambled visit by China's security chief for what the White House described as "candid, blunt discussions" seems to have averted American sanctions. Subsequently, after more damage control, despite US public opinion being increasingly negative on China (over China stealing American jobs, as Trump puts it), President Obama told the media that China's peaceful, orderly rise was in the US's interest and good for the world.

Sensing sensitivity towards China within the US political horizon, President Xi, during his visit to the United States opted wisely for a risk-averse strategy with minimal substance and candor. He presented himself only as a man with a Chinese Dream and a plan aimed at the great rejuvenation of the Chinese nation. Carrie Gracie of the BBC drew attention in this regard to the fact that "China is now on track to overtake the US within the decade and regain its status as the world's biggest economy". This assumes an interesting connotation given that China is now intent on building military force and diplomatic clout to match its economic might. They also realise that the surest way forward in achieving their objective of becoming the world's largest manufacturing and trading nation would be through US co-operation, at least in the economic sphere.

President Xi has been pushing his "new model of great power relations" with regard to the United States. He believes that this will enable China to inexorably advance and avoid wars at the same time. This policy is being followed by China despite being aware that the US record vis-a-vis China in recent times has not always been benign - the US threatening China's political system by pushing democracy, undermining its territorial integrity by supplying arms to Taiwan and through schemes to contain China by surrounding it with American alliances and military deployments.

Obviously aware of these semi-hostile factors, President Xi has taken measures to contain possible adverse effects of such moves on his country. In his first four years in power, President Xi has used anti-corruption and ideological campaigns to stiffen the sinews of the Communist Party and buttress one-party rule. This he has done because he believes that China, to move forward, needs discipline.  

CHINA'S REAL STRENGTH LIES IN SOFT POWER: Referring to Chinese efforts towards a more realistic bilateral relationship with the US, J. Stapleton Roy of CNN has noted that in the last 44 years, five Republican Presidents and three Democratic ones have all concluded that seeking constructive relations with China is in the U.S. national interest. Secondly, he has observed that as the two principal powers in the Asia-Pacific region, they will be interacting together and for this the US needs a long-term perspective. Lastly, he has pointed out that the US needs to acknowledge that China's real strength lies in the soft power that it has accumulated through its example of rapid economic development. This has given it the aura of a successful rising power.

China knows that there are many factors that are still influencing US views regarding it. It is hoping however that sooner rather than later, the United States will start relying more on an effective functional bilateral relationship with it.

Pakistan: China's relationship with Pakistan has also continued to grow over the past year. The bilateral friendship that started more than sixty years ago acquired a new special dimension in April 2015 with Chinese President Xi Jinping arriving in Islamabad. He and Pakistan's Prime Minister Nawaz Sharif unveiled new trade and investment deals worth $28 billion. The deals were part of the proposed $46 billion China-Pakistan Economic Corridor (CPEC) project, which envisions Chinese investment fuelling road, rail and electricity projects that will create a trade route from the Chinese city of Kashgar to the southern Pakistani port of Gwadar (control of which was transferred to a Chinese public company in 2013).

The CPEC project will see the 3,000km trade route built over the next 15 years. It will give China an alternative trade route to using ports on its eastern and southern coasts, and therefore cheaper market access to the Middle East - crucial for the country's oil import. It will also see 10,400MW of new power projects added to the Pakistani national grid by 2018at a cost of almost $16 billion. The addition of a further 6,600MW has also been proposed after 2018, at an additional cost of $18 billion. When completed, these projects would see Pakistan's current electricity output double. This Chinese promise was however not a one-way street. The Chinese President took this opportunity to seek Pakistan's cooperation in quelling the ingress of armed Chinese separatist groups from Pakistan's north into China's Xinjiang province.

Pakistan and China have held close diplomatic, military and economic ties for decades, but these projects represent the largest investment in Pakistan's history by the Chinese regional hegemon, as it seeks to solidify economic advantages against regional rival India and the United States.

This use of economic muscle by China has also helped in deepening its ties with West-wary Iran. After a visit to Tehran by Chinese President Xi Jinping in January 2016, it was revealed that Beijing and Tehran had agreed to expand their bilateral trade engagement to $600 billion over the next decade. This immediately received the support of Iran's religious leader Ayatollah Ali Khamenei. He termed China as a country Iran could trust. Such a measure was viewed as significant by analysts as Iran had just emerged from years of economic isolation by the United Nations' nuclear watchdog ruling that it had curbed its nuclear programme, clearing the way for the lifting sanctions of UN, US and European Union.

Iran: Xi's visit to Iran was within the paradigm of a three-nation regional tour that had already taken him to Egypt and Saudi Arabia, Iran's regional rival. Xi became the first Chinese leader to visit the Islamic Republic of Iran in 14 years. During his visit to Iran Xi also underlined that China was ready to upgrade the level of bilateral relations and cooperation so that a new chapter could start in bilateral relations.

It may be mentioned that bilateral trade between the two countries stood at some $52 billion in 2014, but that figure dropped last year due to plunging oil prices. Officials from Iran and China signed 17 documents and letters of intent to broaden bilateral cooperation in energy, industry, transportation, railways, ports, new technology, tourism and the environment. By this latest initiative China also cautiously pointed out that it was careful not to allow the 'cold war' between Iran and Saudi Arabia becoming an obstacle for China to have a good relationship with both the countries. China also carried their subtle diplomatic efforts further when President Hassan Rouhani of Iran stated that the two countries had agreed to cooperate on the issue of "terrorism and extremism in Iraq, Syria, Afghanistan and Yemen".

Middle East: Geoffrey Aronson, an American specialist on Middle East  affairs, has made certain important points while commenting on China's recent overtures to the region. He has noted that Xi Jinping's first visit to the Middle East (in 2016) as China's President reflected three emerging, defining elements in the conduct of Beijing's foreign policy in the region. According to him, the basic building block of Chinese policy remains the development and expansion of economic and trade links throughout the region - "from the massive energy markets of Saudi Arabia to infrastructure developments in Iran".

China also announced during Xi's visits to the region that it would not only build a nuclear reactor in Saudi Arabia but would also set up funds with the United Arab Emirates and Qatar worth a total of $20 billion to invest in conventional energy. Aronson has correctly pointed out that China's emphasis on support for state sovereignty, noninterference in domestic affairs and a "no enemies" policy offer a stark contrast to the interventionist policies of the West.

Xi's visit to these three countries highlighted Beijing's effort to place China at the centre of a new system of international trade. It also underlined that the expansion of economic ties had created an imperative for increased diplomatic engagement to protect and expand these relationships.

Another significant feature during this regional visit was Chinese President Xi Jinping calling for the establishment of a Palestinian State, with East Jerusalem as its capital. Through this China underlined that the Palestinian problem "should not be marginalised". Xi also announced aid of 50 million yuan ($7.6m) for a solar power station project in the Palestinian territories. This was welcomed by the Arab League.

STRATEGIC AND SECURITY DIMENSION: It needs to be understood that the globalisation of China's own definition of national security has both a strategic and a security dimension in the Middle Eastern region. China's growing role in UN peace-keeping efforts is increasingly being supplemented by sovereign expansion of China's military capacity - the most prominent example being the creation of the first Chinese military base outside China's borders - in tiny Djibouti, where the US and France also maintain military forces astride the critical maritime route from the Chinese mainland to its vital markets via Suez to the Mediterranean.

China's current reappearance on the international stage also underlines Beijing's growing presence in Asia-Pacific region and also signals a challenge to the system shaped and dominated by the United States, France, Britain and Japan over three quarters of a century. This was demonstrated in the manner in which China used its political-financial clout with aid-dependent Cambodia, a member of ASEAN, in containing criticism of China by ASEAN States (which requires consensus) pertaining to Chinese views regarding Chinese jurisdiction over the South China Sea.

The writer, a former Ambassador, is an analyst specialised in foreign affairs, right to information and good governance.
muhammadzamir0@gmail.com