Why China wants to win friends and influence neighbours

The Chinese economy may be slowing, but the country remains on a roll. The year gone by, 2014, saw Beijing display a new level of confidence and poise, as it steadily enhanced its influence across its region and the world.

At first sight, 2015 would appear to promise more of the same. But in actual fact, we may see a somewhat different China in terms of its handling of its neighbours, both friendly and otherwise.

Beijing is becoming increasingly aware that its policies have led to heightened tensions between China and its neighbours. India has reported a steady drumbeat of Chinese incursions into what it considers its side of the Line of Actual Control. In April 2013 in Depsang and in September 2014 in Chumur, the People’s Liberation Army staged confrontations to coincide with visits of its senior leaders to India.

China and Japan have faced off several times off the Senkaku/Diayou Islands and in 2013, China took the unprecedented step of declaring an Air Defence Information Zone (ADIZ) around the islands over Japanese controlled air space, demanding that all flights through the zone be notified to Beijing.

Diplomatic

In the South China Sea, China started asserting its authority by issuing fishing permits in what it claims is its EEZ. It threw out the Philippines from the Scarborough Shoal and has strengthened its military presence there. It has also started building islands in disputed reefs to strengthen its claims.

These developments led countries in the region to seek America’s help and, in turn, the US beefed up its presence in the area. This led to serious confrontations between the US and Chinese ships and aircraft.

So the Chinese now appear to be working hard to come across as being less prickly and overbearing. Even while remaining determined to pursue a foreign policy “with Chinese characteristics,” they intend to ensure that their policies do not give their adversaries an opportunity to build up a ring fence around them. To this end, they intend to change their diplomatic style, as well as use their enormous pile of cash to win friends and influence people.

The world often sees China as a monolithic, monochromatic nation, relentlessly marching towards a future which it has clearly defined for itself. The reality, however, is of a nation led by a Communist party elite which is very good at doing what it does, and which works hard at remaining where it is — at the top of the country’s political pyramid.

In 2014, even while the country remained riveted by a major anti-corruption campaign which has begun reaching the higher echelons of the system, it took time to conduct the Fourth Plenum in which the Communist party sought to take steps to shore up the legitimacy of its rule in the country.

Perhaps more significant was a major party work conference convened in Beijing involving the entire Chinese elite — party, military and government — to discuss the country’s future foreign policy. Xi’s remarks at the conference were nuanced and sought to distance China from its brash and assertive posture.

Friendly

At another level, Xi signalled that China wants to be seen as a big power like the US, which is not just feared but also trusted and emulated across the world in a range of areas.

As it is, through the year, Beijing has taken step away from the brink. On the sidelines of the APEC summit in early November 2014, Xi Jinping had a short meeting with his Japanese counterpart, Shinzo Abe and prior to that a four-point plan was agreed upon to reduce tension, promote dialogue and create crisis management mechanisms.

Simultaneously, China also signed two important military confidence building agreements with the US. One provides a mechanism for notifying the two countries of each other’s activities, including military exercises. The second sets rules of behaviour in cases of encounters in the sea and air. The APEC meeting itself came in the wake of China and its BRICS partners setting up the New Development Bank, headquartered in Shanghai. Simultaneously, Beijing also initiated moves to set up a new Asian Infrastructure Investment Bank (AIIB) with participation of a number of key Asian countries. Around this time, China also announced massive investment plans within the country, as well as $40 billion for the Silk Road initiative to develop railways, roads, pipelines and ports in areas of its interest.

Consequences

At the sidelines of the APEC summit, Xi told a group of CEOs that China’s outward bound investment would top one point two five trillion dollars over the next ten years, that it would import ten trillion dollars worth of goods over the next five years and 500 million Chinese tourists would go abroad. Good relations with China, Xi seemed to be suggesting, would be of mutual benefit. In this manner, Beijing is seeking to align the interests of its neighbours with its rise, and thereby seeking to convince them that it is not threatening.

None of this suggests that the Chinese will immediately become less assertive or abandon what they call their “core interests” — control over Tibet and Xinjiang, reunification with Taiwan and their more recent inclusion to the list, the Diayou islands. But it could signal the beginning of incremental change which could have implications of Beijing’s dealing with its fatuous South China Sea claims, as well as the disputed border with India.

A shift in Chinese behaviour, howsoever motivated and incremental, will have important consequences for Asia, which is otherwise witnessing a major arms build up occasioned by Beijing’s own conduct. To use Xi’s phrase, “win-win” formulations are infinitely preferable to being tangled in self-defeating conflicts.