What to expect from China’s foreign policy

One of the most surprising aspects of Chinese diplomacy since mid-2013 has simply been the amount of time and energy the leadership has devoted to it. Xi Jinping looks more like a ‘foreign policy president’ than any of his predecessors – having travelled extensively and met a host of foreign dignitaries at home. Premier Li Keqiang has also been active internationally, particularly in dealings with Southeast Asia and Europe. As China’s rise on the world stage continues, what are the themes to look out for in 2015?

Given competing pressures on policy resources, the leadership’s high level of international engagement is in itself revealing. After the Communist Party’s key anti-corruption ‘campaign’ is taken into account, along with international diplomacy, it is hard to see much room for other policy priorities. As a result, domestic economic reform has been taken forward in a largely technocratic and politically low-key manner.

The attention to foreign policy has underpinned some notable developments. In June 2014 China hosted the Conference on Interaction and Confidence-Building Measures in Asia (CICA), a hitherto little-known institution whose membership stretches across Eurasia. This prompted speculation that China was trying to boost an Asian regionalism that excludes the US. Such concerns, however, were mitigated by Beijing’s hosting of the APEC summit in November and by the successful meeting between President Xi and Barack Obama, which resulted in bilateral agreements over carbon emissions, technology and military communication.

China’s international policy has for a while been balancing engagement with the existing international order and a growing element of gradual ‘revisionism’ – that is, practical efforts to reform that order. We saw more of the latter in 2014. Particularly significant was Beijing’s launch of a new development bank, the Asian Infrastructure Investment Bank (AIIB), though the US persuaded several key countries not to participate.

The AIIB ties in with the agreement in July 2014 to establish a new ‘BRICS’ development bank (called New Development Bank) and Beijing’s plans for a Silk Road Fund to finance China’s promotion of land and maritime trade routes (though the ‘silk road’ policy is more a repackaging of existing trends in Chinese engagement across Eurasia than a completely new initiative).

None of these initiatives is unilateral. Yet taken together, they constitute more proactive steps to reform the international order than China has attempted previously. In the aftermath of the global financial crisis of 2008–09, Chinese revisionism had been more modest in scope, directed towards increasing the country’s vote in international financial institutions and supporting the G20.

Still, these steps do not have to be seen as an effort to establish an alternative order, a Pax Sinica of the sort predicted by those who look back to Qing dynasty regional hegemony for inspiration about China’s future relationships in Asia. China remains strongly engaged with post-1945 institutions. In some ways its approach to international relations harks back to an idealized post-war global order embodying non-interference and the sovereign equality of states. Hence Beijing’s emphasis on the role of the United Nations in international decision-making.

Xi’s speech at a domestic meeting on foreign policy in November 2014 sheds some light on the leadership’s intentions. The tone was softer than previously, and the main message was one of policy continuity. Xi talked about ‘reform’ rather than revision of the international order, with no hints that China is preparing for a global leadership role or envisages exceeding the US’s power any time soon, even as its economy approaches that of the US in size.

What does all this mean for international affairs in 2015?

Firstly, China’s economic diplomacy will grow in scale and geographical scope. It is this – rather than compromise on long-standing positions – that Beijing is likely to try to use to repair relations in the region which have been damaged by maritime disputes (though such tactics may not work). Given the lack of trust over security issues, and the difficulties Xi has had in getting US buy-in for his ‘new type’ of bilateral relations, economics may also increasingly be the focus of China’s approach to the US.

Secondly, we should expect more soft revisionism from China, pushing for reform within existing institutions and for alternatives when the appetite for reform is not there. This means that Chinese policy in 2015 will depend to a significant degree on the approaches of others, particularly the US. By opposing the establishment of the AIIB, the US missed an opportunity to demonstrate that it is not trying to contain China’s rise.

Thirdly, expect ongoing realignment in China’s partnerships. This has been taking place quietly on the Korean peninsula, with relations between Pyongyang and Beijing the coolest yet. It is also evident in China’s rebalancing of its diplomacy away from Pakistan and towards India. China will continue to prioritize its relationship with Russia, though Chinese leaders will remain cautious about providing explicit support for Vladimir Putin’s own revisionism, very different from China’s in style and substance. Western Europe will remain lower down the list of priorities.

One area where realignment is unlikely is in China’s troubled relationship with Japan. The November meeting between President Xi and Japan’s Prime Minister Shinzo Abe left relations at the end of 2014 looking better than they were at the beginning of 2014. But the fundamentals have not really changed, even though there remain good reasons to doubt predictions of military conflict.

In sum, Chinese foreign policy this year will merit careful attention.

This article is published in collaboration with Chatham House. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Tim Summers is the Senior Consulting Fellow, Asia Programme (based in Hong Kong).

Image: Pedestrians walk under red lanterns in Shanghai, January 24, 2014. REUTERS.