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Two Chinas, One System - Dissimulation and Strategic Opportunities

Two Chinas, One System - Dissimulation and Strategic Opportunities
 François Godement
Special Advisor and Resident Senior Fellow - U.S. and Asia

Not enough commentary has focused on the extraordinary diversity of China’s international posture these days. Within the same fortnight, Xi Jinping has announced at the World Health Organization a USD 2 billion contribution towards recovery from Covid-19, targeted at developing countries, and a host of medical initiatives in Africa. Liu He, the chief Chinese trade negotiator, held a call with his American counterparts where he reiterated his commitment to implementing the Phase One trade deal for 2020. Wang Yi, China’s Foreign affairs Minister, talks about the need to avoid a Cold War with the United States. Liu has separately committed to holding talks in earnest with the EU, in order to arrive at a long-sought Bilateral Investment Agreement.

Meanwhile, China’s spring session of the National People’s Congress (NPC) is setting a 6,6% increase in the defense budget, at a moment when other central budget expenditures are set to decrease. The rise in military spending is set to exceed, possibly by far, the country’s economic growth in 2020, for which no target is published this year. Even more tellingly, the NPC is to immediately write a national security law for Hong Kong, where the official goal is now "long-term peace and stability", terms previously used for Tibet and Xinjiang. The adjective "peaceful" is dropped from the mention of Taiwan’s reunification with the mainland.

The new Chinese posture alternates hardline decisions and expressions – think "wolf warrior diplomacy" for the latter – with tailored initiatives, and consensual but vague commitments on some issues. Is this merely obfuscation, or is there a logic at work in this sharply divided international posture? Certainly, the new brand of public diplomacy under Xi Jinping has made ample use of lies. The most egregious case used to be Xi’s assurance to Barack Obama in 2015 that China would not "militarize" the South China Sea. It will now have to be replaced by the coming endgame in Hong Kong, where in a series of well-choreographed moves, China has done away with the commitment to uphold "One country, two systems" until 2047. Officially nesting China’s security organs inside Hong Kong, affirming the precedence of its Central Liaison Office over the Basic Law, and leaving the Special Administrative Region’s (SAR) "government" the mere task of transposing the future law into the region’s legal system ends the existence of Hong Kong as an autonomous entity. In the 1930s, an expression took hold: treaties were not worth more than the paper that they were written on. This is now the fate of the 1984 Sino-British Joint Declaration.

In a less dramatic fashion, the renewed commitment to increase China’s purchases from the United States by USD 200 billion is also a white lie. The target seemed very problematic even before the Covid-19 crisis struck. It seems even more out of reach today, even if China shifts purchases (notably agricultural products) from the EU or Argentina to the United States. But in this case the lie is a bow to Donald Trump’s earlier campaign strategy: China has expected that by granting him the appearance of a trade victory, it will obtain a much softer attitude on more fundamental demands of change.

Xi’s regime has this propensity to lie in common with other dictatorial regimes (and also many authoritarian or populist leaders). But this should not distract us from observing other defining features of China’s foreign posture. First is a distinction between what used to be called the "near-abroad" in the case of the Soviet Union, and partners farther away, where China’s long political and military arm does not – yet – reach.

Hong Kong’s impressive public protests, and the shift of Taiwan’s electorate away from cross-straits relations, are consequences of China’s slide back to a full-set dictatorship.

But today’s distinction is very different from what it was in Deng Xiaoping’s and Hu Jintao’s days: then, getting along with the neighborhood (zhoubian waijiao) was a way to loosen the perceived encirclement by the West. Taiwan and Hong Kong were the first to benefit from this for a few years after 1989. Under Xi, China is vastly increasing the pressure on both Hong Kong and Taiwan, even as it conducts talks with the United States on its other core objective – keeping global trade open. Is this because China is weaker or stronger?

Evidently, the latter rather than the former. Hong Kong’s impressive public protests, and the shift of Taiwan’s electorate away from cross-straits relations, are consequences of China’s slide back to a full-set dictatorship. But Xi and his colleagues are looking at a wider correlation of forces. Ever since the 2008 global financial crisis, through the Euro crisis of 2011 and now the coronavirus pandemic, they are tempted by a different narrative: the decline of America and more generally of Western democracies, with each crisis producing a new balance of forces that runs in favor of China’s system. In 2008, Karl Polanyi’s The Great Transformation (1944) was cited at China’s Institute of Contemporary International Relations (CICIR), the State Security’s think tank: Polanyi had predicted a backlash from the market economy through successive crises. Liu He, reputedly an economic liberal and arguably the most talented expert among top leaders, edited, in 2013, a lengthy study that points out that the two world crises – 1930 and 2008 – have actually increased China’s share in the global economy (Liu He, ed., Comparative Study of Two World Crises, China Economic Publishing House, 2013, in Chinese). Xi Jinping has very recently explained to a student audience in Xi’an how "it’s been 70 years, now we are strong, now we are rich (…) the great steps in history were all taken after major disasters. Our nation, it rises and transforms through hardship and difficulty. The Chinese people deservedly take pride in this form of cultural self-confidence".

Xi’s strategic brand is on display in the treatment of the Hong Kong crisis. He knew how to stop the push for an extradition law in October, explaining to a captive Central Party School audience that policy should be inflexible in principle, but flexible on tactics. The following month came the CCP’s 4th Plenum – focused on legal affairs, and among its published outcomes, little-noticed at the time, was the completion of institutions and mechanisms for the preservation of national security in the HKSAR. Xi Jinping pauses, but rarely if ever steps back. The decision announced at the recent NPC session makes an extradition law wholly unnecessary, although that will also likely come in due course. The probable inclusion of "terrorism, separatism, and interventionism" in the coming law is so wide, it makes Hong Kong as dangerous as mainland China for critics: this applies particularly to the Taiwanese whose main flight connection to the outside world is via a stop-over in Hong Kong.

But the other side of the coin is a growing mobilization to fill the gaps left by America’s vocal pullback from some major international institutions, and by exploiting or fostering disunity among Western countries. In this category, Xi’s address to the World Health Assembly is a model. Contrary to all expectations, he formally accepts the idea of an investigation into the coronavirus pandemic (which had been requested by 64 members of the Assembly).

China will develop even more its own bilateral initiatives, especially in the direction of African countries, and developing countries more generally.

He also commits USD 2 billion over two years to repair the consequences of the pandemic. Announced at the WHO, it is unclear whether this sum – which represents almost half of one year’s budget for the organization – will indeed be channeled through the WHO. The subtext throughout the speech indicates rather that China will develop even more its own bilateral initiatives, especially in the direction of African countries, and developing countries more generally. Similarly, debt forgiveness is mentioned without any figure, and macro-economic stability goes along with the preservation of supply chains, a key Chinese interest. In domestic policy, China is actually delivering much less stimulus to its own economy and therefore to a global restart than other major industrialized countries. As to the investigation into the epidemic, is it a "review of global responses" under the auspices of the WHO, and undertaken only after the pandemic is brought under control? These are indeed Xi’s terms, but foreign minister Wang Yi has left open an investigation into the source of the pandemic. Since a difference of opinion is excluded, one can only conclude that ambiguity reigns again.

While the regime strikes hard where it has the power to do so, it is clear that it wants to leave room for some more optimistic interpretation. There is no shortage of global partners who still hope for convergence with China on public goods. Health, climate, nuclear proliferation, and even, for some, the preservation of multilateralism are presumed to be Chinese interests. While China actually pursues a more nationalist and power-hungry agenda, it does remember that it would not pay to completely dispel these hopes. Expect more of these dual acts from Beijing.


Copyright: Noel CELIS / AFP

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