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March 2023

China Trends #15
China’s Diplomacy: A Triumph of Cost-Benefit Analysis

Introduction - François Godement
Avoiding America’s Trap - Mathieu Duchâtel
China Seducing the European Union: Optimistic Narrative, but No Change in Policy - Marcin Przychodniak
The Belt and Road and the Global Development Initiatives: Don’t Compare Apples with Oranges - François Chimits and Francesca Ghiretti

About

China Trends seeks understanding of China from Chinese language sources. In an era where the international news cycle is often about China, having a reality check on Chinese expressions often provides for more in-depth analysis of the logic at work in policies, and needed information about policy debates where they exist. China Trends is a quarterly publication by Institut Montaigne’s Asia program, with each issue focusing on a single theme.

Introduction

François Godement, Senior Advisor for Asia
 
These days, Xi Jinping’s global offensive is everywhere on display, from his renewed trips abroad to China’s public diplomacy. A Global Security Initiative, a Global Development Initiative, and now even a Global Civilizational Initiative: top heavy in rhetoric, these offers to the world considerably broaden China’s bid for what it has called "discourse power" (话语权). Zheng Bijian, a Party adviser, who has promoted at home and abroad the notion of China’s "peaceful rise" in 2003-2004, also seems to have used first the notion of discourse power. Hu Jintao, China’s leader from 2002 to 2012, made this notion a prerequisite to advance China’s soft power. More simply, Xi Jinping spoke in 2012 to "telling China’s story well" (讲好中国故事).
 
At the best possible moment for its stand regarding Russia’s war on Ukraine, China poses as a mediator between Iran and Saudi Arabia. After similar efforts in 2016 in Myanmar, China is also playing a role as a facilitator among conflicting parties in the Horn of Africa. And of course, China’s twelve-point proposal for a solution to the "Ukraine crisis" is also a step up for China’s diplomacy. Taken together, these moves are quite a change from China’s usually cautious and slow-moving diplomacy, and from an ingrained habit of describing any assertive development from China as merely reactive to the wrongful actions of one or the other international actor.
 
China’s growing economic weight inside the global economy, decades of increases in military expenditures that now surpass its GDP growth rate, its apparent centralization of power that contrasts with the political strife in almost all the world’s democracies, lend further credence to the notion that China is a global power on the way to reshape the international order. We are now close to half a century of fascination with the "rise of China". On several occasions in those decades, assumptions were made about its direction. Global convergence, based on China’s global opening and turn to market, proved to be wrong. Today, China’s diplomacy is suddenly seen as turning from a passive to an active role, along with the ability to defy the United States for global leadership. All previous restraint - including China’s well-known reluctance to shoulder responsibilities - may be forgotten. China’s priority courting of countries in the so-called Global South and its translation into an anti-American and anti-Western consensus impress audiences everywhere.

China’s diplomacy is suddenly seen as turning from a passive to an active role, along with the ability to defy the United States for global leadership.

But we should look closer, with two guiding observations. First, do Chinese capacities match the long shadow it projects on the global community? Second, what are the risks that China is ready to take in its international endeavors – as a blustering enemy of Western democracies, a mediator or peacemaker, and a friend to autocracies in need? The reality remains far behind the claims. It paints a different picture: that of an opportunistic power that is making use of weaknesses and divergences in the camp of democracies, while denouncing what it calls an encirclement.

Financially, China accumulates surpluses - in Western currencies. What is called China’s soft power is its trade and lending strength. Yet it can hardly pull away from the dollar or call in its loans to the emerging world: its power as a creditor rests on its income as an exporter. Our insatiable thirst for its products is its chief source of wealth. The calculus on gains from trading with countries such as Russia or Middle Eastern ones, which it dominates commercially, is a sideshow. Militarily, decades of budget expansion are not equivalent to combat deployment and experience. Teasing and occasionally crossing red lines - or changing the goal posts - is the ground on which China excels, largely because it can count on its counterparts’ reluctance to engage in conflicts. It conveniently forgets this reluctance when it denounces sanctions as almost an act of war. A major part of its defense program is achieving near-parity with the United States in terms of nuclear weapons. Yet one does not conquer territory with nuclear weapons.
 
Is China becoming a mediator? Its role over the compromise reached by Iran and Saudi Arabia does give pause. But let’s look beyond appearances. It was in the 1980s that Ryadh bought Chinese mid-range missiles. Iran has been consorting with China ever since the Iran-Iraq war. The Saudis and Iranians were already talking quietly in Baghdad before that location became unsuitable. China does have an essential quality for a mediator: it is truly equidistant from each, as was graphically shown by Xi Jinping’s consecutive visits in 2016 to Saudi Arabia, Egypt and Iran. American - and European - sanctions on Iran, the Saudi kingdom’s increased hostility to the West’s human rights approach after the Khashoggi murder, Europe’s lack of leverage, allow Beijing to play the role of a host and to offer its good offices. But where are the Chinese guarantees to any aspect of the deal? This is no Camp David. And of course, China’s partialness towards Moscow prevents any comparison. Were a solution to the Ukraine war be found at some point, China could be a messenger among others, and it could grade up or down its support - which is what is coveted by all sides. In all likelihood, it would end up being a godfather and guarantor for Russia, in a situation which would best recall the 1954 Geneva Conference. It cannot be a mediator.

China is also not a frequent gambler and risk-taker, as the nuances of its relationship with Moscow show. Indeed, there is massive overt support for Putin, to the extent that Xi extends wishes for his "re-election": an unprecedented breach of Beijing’s opposition to external Interference in domestic affairs. The "no limits" friendship is reaffirmed, as is a litany of complaints ranging from NATO enlargement to alleged nuclear waste from Japan’s Fukushima nuclear plant. But nothing is said about material support to Russia - especially weapons - and Putin’s early claim that an agreement about the Power of Siberia 2 gas pipeline was about to materialize has not been confirmed during the meeting by China.

Teasing and occasionally crossing red lines – or changing the goal posts – is the ground on which China excels.

China’s game is skillful. Invocation of the UN charter and norms comes at little cost since the UN is paralyzed for action over Ukraine by Russia’s - and China’s? - veto power. The cost to China for its extraordinary overt leaning to Russia is not huge: Europe has no strategic weight in the Asia-Pacific beyond isolated initiatives. It is rational for China to predict that the wish of many Europeans to bring an end to the war will keep the relationship open, if not effusive. As to Russia, "it’s in hardship that one sees true friends", wrote Xi Jinping in a Russian publication. Although to be fair, this was expressed in the context of Covid, it also demonstrates the sense that Beijing has the upper hand over Russia. Finally, Xi Jinping has opened a barrage of denunciations against the United States, without apparently crossing the red line of substantial weapon deliveries. Until better informed, the allegations aired up to now concern infringements, not an all-out shift to arms deliveries.

As has been the case in the language that China has been deploying at the UN for several years, China’s word offensive is relentless, 360 degrees, and full of promises of common prosperity under one roof. Strikingly, there is never a single proposition aiming to make international institutions more effective. Binding rules are invoked only when they restrain international action. Lofty aims - the last one out of the box is the "Global Civilisation Initiative" are not backed by consequential follow-ups: the Belt and Road does stand out, but it is more of a commercial venture over infrastructures than a feat of development assistance.

It is rational for China to predict that the wish of many Europeans to bring an end to the war will keep the relationship open, if not effusive.

China’s positive strength remains its trade balance and the power that flows from it. Negatively, it benefits from the doubts about the long term engagement of the United States to safeguard the international order, and from Europe’s collective weakness: we have been able to unite over Russia’s war much better than many predicted, but we cannot deliver as much as would be required, and our political leaders fear opinion fatigue.

China is cleverly, and sometimes daringly, exploiting these opportunities. On March 22, Xi Jinping’s parting public words to Putin as he left Moscow were: "Right now there are changes - the likes of which we haven't seen for a hundred years - and we are the ones driving these changes together". The notion of a "once in a hundred years" opportunity is for Xi a code name for his belief in the decline of the United States and the West. So far, it is a low cost international strategy. Behind the chanting about the UN, there is a search for "major power" coalitions under toothless international regimes. Authoritarian regimes can defend themselves from global chaos, democracies need rules. China’s vulnerability under such a situation would be over trade. A major exporter needs rules at least in that regard. And so, our continued addiction to convenient Chinese goods is the life insurance for China’s low cost international strategy.

Avoiding America’s Trap

An American trap? The idea is present in Chinese strategic discussion circles. On the one hand, it results from China's observation of Russian setbacks in Ukraine. On the other hand, it consists of a perception of US actions as seeking to provoke China into overreaction and self-isolation. Mathieu Duchâtel, Director of International Studies at Institut Montaigne, looks into this notion of trap in Chinese expert writings. The recommendation deriving from this analysis is for Chinese foreign policy to go around the traps, and expand where it can expand.

China Seducing the European Union: Optimistic Narrative, but No Change in Policy

A Chinese charm offensive towards Europe, despite Xi’s preference for the Sino-Russian strategic partnership? Marcin Przychodniak, from the Polish Institute of International Affairs, argues that China has adjusted its narrative towards the European Union, but that there is little change in substance. The resumption of high-level diplomatic meetings post-Party Congress encourages the European advocates of greater diplomatic engagement with China, but Chinese analyses do not suggest a shift away from inflexibility.

The Belt and Road and the Global Development Initiatives: Don’t Compare Apples with Oranges

Has the Global Development Initiative replaced the Belt and Road Initiative? François Chimits and Francesca Ghiretti, from MERICS’ Brussels office, review various Chinese writings on this seemingly abstract question, which bears important consequences for China’s engagement with the developing world. Chinese analysts see the two initiatives as complementary rather than contradictory but questions remain regarding the nature of this complementarity.

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