In 2015, Xi Jinping continued his hyperactive diplomacy, visiting fifteen different countries with-in the year. He also packed in bilateral meetings with world leaders at multilateral gatherings, including with the African Union (at the China-Africa Co-operation Forum in Johannesburg in December) at the United Nations General Assembly, the BRICS and SCO Summits and even during the World War II (WWII) commemorations in Moscow and Beijing. Just as in 2014, however, neither Xi nor Premier Li Keqiang visited the Middle East.
Throughout all of this frenetic foreign affairs activity, there has been a strong accent on economic diplomacy and, in particular, advancing the cause of China’s ‘One Belt One Road Initiative’ 一带一路 (also known as ‘Belt and Road Initiative’ or ‘OBOR’) (See Forum ‘One Belt One Road: International Development Finance with Chinese Characteristics’, pp.244–250).
Xi had announced his idea for a ‘Silk Road Economic Belt’ and a ‘Twenty-first Century Maritime Silk Road’, without any details, during visits to Kazakhstan and Indonesia in September and October 2013. One month later, the Third Plenum of the Communist Party enshrined it as policy. It took until March 2015 for the State Council to publish a detailed ‘Action Plan’ for the policy, which had been jointly drafted by the National Development and Reform Commission (NDRC) and ministries of Commerce and Foreign Affairs. In the same month, Xi outlined the plan to an international audience at the Boao forum in Hainan Island.
The OBOR Initiative is said to have diverse aims. One is to use Beijing’s large foreign exchange reserves to boost exports of domestic producers by investing in large infrastructure projects that will create demand, an idea touted for several years by domestic analysts. It may also be a way to absorb excess industrial capacity in struggling sectors such as steel. It could eventually help alleviate concern in China about over-reliance on Malacca Strait shipping, the conduit for around ninety percent of China’s oil imports, by creating alternative trade routes. The parallel policy of creating new financial institutions such as the Asian Infrastructure Investment Bank and the New Silk Road Fund should help to bring more choice in international infrastructure financing.
Perhaps most importantly, the initiative should be a neighbour-friendly way of creating a more benign regional security and policy environment for China to get on with pursuing its domestic agenda without active or passive interference from the region. Supporters look forward to China achieving its stated goal of improved regional security and prosperity through ‘common development’ 共同发展. It is also a compelling soft power strategy, recalling China’s rich history as a trading nation in the era of the Silk Road.
The State Council has published a dedicated website for the OBOR Initiative with maps being revised as countries express greater or lesser interest in being involved. Observers in some of the targeted countries, like India, have been skeptical about the benefits to them, even suspecting malign strategic intent. Foreign Minister Wang Yi 王毅 directly addressed these concerns in his annual address to the press in March, when he said that the initiative was ‘not a tool of geopolitics’ and cautioned against viewing it through an ‘outdated Cold-War mentality’.
There is no question that China is showing a high appetite for risk. This is a difficult initiative, given that it relies on Chinese enterprises making major investments when the prospect of financial return might be at best remote, and security risks could be significant. According to political scientist Xie Tao 谢韬 of Beijing Foreign Studies University 北京外国语大学, the Chinese leadership has deliberately described the policy as an initiative, not a strategy, to avoid implying that participation will be mandatory for Chinese banks, enterprises, and other players.
If they do join in, there could be substantial risks to Chinese consulates of the kind seen in Libya in 2011 when the Chinese military had to manage its largest-ever evacuation (nearly 39,000 citizens) from a foreign country when a wave of unrest saw direct and violent attacks on Chinese oil and other firms there. The plan for OBOR is for large-scale projects, likely to involve large numbers of Chinese workers. The only project so far initiated, a dam in the new ‘China Pakistan Economic Corridor’, involves a particularly unstable region of Pakistan. Pakistan has agreed to provide 10,000 troops and commandos for the project’s security.
On the other hand, if China can contribute to growth and stability in these difficult and volatile border areas, benefit will also accrue to the US, Russia, and other regional countries and major powers.
There has been much discussion in China and abroad about the impact of a rising China on global institutions and governance. With Xi Jinping enforcing more and more restrictions on Chinese citizens’ access to justice and civil liberties and freedoms (see Chapter 2 ‘The Fog of Law’, pp.64–89), there is nervousness abroad about China’s intentions with regard to international institutions.
The US government has acted on these concerns. In an embarrassing diplomatic failure, when China announced the creation of the Asian Infrastructure Investment Bank (AIIB), the US government lobbied its allies not to join despite the fact that the new bank looked set to be established according to international norms, and was a ‘responsible stakeholder’ response to a real and urgent need for infrastructure funding across the Asian region. The AIIB opened for business on 6 January 2016, with fifty-seven founding member countries. Many US allies signed on, including Australia, Germany, and a particularly enthusiastic United Kingdom.
China is certainly having an impact on global institutions. One example from 2015 is the decision in December by the International Monetary Fund (IMF) to include the renminbi (RMB) as one of five currencies in its Special Drawing Rights basket from October 2016. This reflects the importance of the RMB to the world’s trade and financial systems.
In a major speech in Seattle on 22 September 2015, Xi Jinping said:
As far as the existing international system is concerned, China has been a participant, builder, and contributor…. A great number of countries, especially developing countries, want to see a more just and equitable international system. But it doesn’t mean that they want to unravel the entire system or start all over again. Rather, what they want is reform and to improve the system to keep up with the times.
Six days later, Xi addressed the UN General Assembly. There he called ‘peace, development, equity, justice, democracy and freedom’, the ‘common values of all mankind and the lofty goals of the United Nations’. He pledged US$1 billion over the next ten years to create a peace and development fund to support the United Nations; the establishment of a new standby peacekeeping force of 8,000 troops; and military assistance worth US$100 million over the next five years to the African Union for peacekeeping missions. At the UN Sustainable Development Summit the following day, he pledged a goal to invest US$12 billion in the world’s poorest countries by 2030.
China will also use its growing influence to support its own political system: such as working to reduce the ability of international organisations, like the UN, to police civil rights, freedom of expression, and justice through the work of the Human Rights Council and the visits and statements of important figures such as UN Special Rapporteurs. China continued in 2015 to take a cautious approach to the UN’s Responsibility to Protect, promoting a very limited range of circumstances that would make non-consensual military intervention an appropriate course of action.
Friends with Benefits
Beijing often looks to Moscow for support in international relations, and vice versa. While Russia’s relationships with Europe and the US remain strained, the potential benefits of a ‘pivot East’ look significant. Putin was the most important guest at the parade in Beijing to commemorate the seventieth anniversary of the Japanese surrender on 3 September (though not many other world leaders took up the invitation). Xi had been to Moscow in May for a similar purpose, returning to Russia for the Brazil, Russia, India, and China (BRICS) and Shanghai Co-operation Organisation (SCO) summits in July, and holding further bilateral meetings with Putin in the margins of other international events. Yet while official rhetoric speaks about the warm relationship, Chinese leaders have avoided explicitly supporting Putin’s domestic politics or his actions in Ukraine. China has no interest in full-scale confrontation between Russia and the West. Indeed, Chinese analysts say in private that the Chinese leadership would prefer Putin to stop fomenting unrest in Ukraine, and fear for the sustainability of Russia’s economy and society. Bilateral trade continued to stagnate in 2015.
On 6 May 2015, when Xi was visiting Moscow for the victory parade, the Rossiskaya Gazeta published an opinion piece by him titled ‘Remember history, look to the future’. Chinese analysts point to one specific phrase in this article of particular significance: ‘силочение – это сило, а самоизоляцуя – обессиленуе’ or ‘unity is strength, while self-isolation is weakness’. This was intended to remind Putin that displaying power through destructive force and alienating the international community was a path to ruin.
If Xi avoids directly speaking to Russia’s affairs, Putin rarely mentions Asia at all, preferring in important speeches to focus on criticising the US and the European Union. As in previous years he declined an invitation to attend the leaders meeting of the 2015 East Asia Summit.
Guiding this policy of presenting a strong friendship to the world is China’s desire to have a smooth relationship with the only other permanent member of the UN Security Council that does not support US primacy in the international sphere in general, and the western Pacific in particular. Bilateral agreements and discussions on issues such as cyber security and human rights provide a counterpoint to what are usually referred to as ‘universal values’. The US and China agreed on a joint cyber security pact in May 2015, for example, which identified key threats to information security as including the use of technology ‘to carry out acts of aggression aimed at the violation of sovereignty, security and territorial integrity of states’; ‘to interfere in the internal affairs of states’ or to disseminate ‘information that harms [the] political and socio-economic systems, spiritual, moral and cultural environment of other states’.
The Moscow-based international software security group Kasperky Lab and the state-owned China Cyber Security Company signed a strategic co-operation pact at the second, China-sponsored World Internet Conference in Wuzhen, Zhejiang province in December. This co-operation is aimed at an unnamed state actor that has mounted sophisticated attacks against both countries.
China’s focus on becoming the dominant power in the western Pacific leaves room for an active role by Russia. As reported in Japan, in 2014 Russia and China had more-or-less equally provoked its air force to scramble fighter jets in what turned out to be an unprecedentedly high number of incidents. The two countries were at it again in 2015, carrying out joint naval and air force exercises over the Sea of Japan from 20–28 August. And Russia finally agreed to sell twenty-four Su-35 fighters to China over three years, with delivery starting in late 2016, despite reported Russian concerns over the risk of reverse engineering.
Fairly Friendly Giants
The current Chinese leadership has made some effort to prioritise relations with India, which historically have never been too friendly. Li Keqiang went there on his first overseas visit in 2013, and Modi’s 2015 tour in China was reciprocating a 2014 visit by Xi. India, like Pakistan, agreed to join the China-led SCO in 2015. Bilateral trade remained at a healthy US$70 billion in 2014 figures, though the balance was very much in China’s favour, with a surplus of around US$48 billion.
Modi, like Xi a nationalist with a forceful personality, visited China in May. A border incursion into still-disputed territory by Chinese troops had marred Xi’s 2014 visit to India, and Modi had annoyed his hosts by making a joint statement with President Obama in January, declaring the importance of freedom of navigation in the South China Sea. China is wary of India’s objectives as a rising naval power, and India is cautious of China’s motives in the Indian Ocean, including through the OBOR Initiative. Xi Jinping had moreover just concluded an oft-delayed visit to Pakistan in April, agreeing to a massive and much-needed US$46 billion investment package. China also announced that it would sell Pakistan eight submarines, more than doubling its existing fleet.
Both China and India seem to want a more positive dynamic. Xi started his visit in Gujarat, Modi’s home state, and Modi landed in Xi’s hometown of Xi’an, with Xi flying there to meet him, a privilege never accorded to any other VIP. This venue was historically relevant as well as personal; Xi’an, or Chang’an, was the dynastic capital of China and the starting point for the Buddhist monk Xuanzang’s famous seventh-century pilgrimage to India to collect Buddhist sutras and relics to nurture Chinese Buddhism. For his part, Modi went home with twenty-one trade and investment deals in his pocket worth around US$22 billion. This is clearly better than nothing, but substance has yet to catch up with diplomacy.
Across the Pacific
In February 2015, China publically confirmed that Xi would make a state visit to the US in September, when he would also visit the United Nations for the annual Leaders’ Week. The unusually early announcement was perhaps intended to provide some ballast for this unstable relationship through the year.
The main causes of bilateral friction were not new. They included cyber espionage: in June 2015, the US Office of Personnel Management (OPM) revealed it had been the target of a data breach involving the records of millions of American citizens. The Washington Post called it ‘one of the most devastating breaches of US government data in history’. Many in the US suspected China was behind it, which China denied. On the eve of Xi’s visit, the Chinese government announced it had arrested the hackers involved. The Post observed that this might have been, as some US officials speculated, simply part of ‘an effort to lessen tensions with Washington’ ahead of the visit.
Another important source of tension was China’s ‘island building’ in the South China Sea—what US Admiral Harry Harris, Commander of the United States Pacific Command, described in a speech in Canberra in 2015 as a ‘Great Wall of Sand’. (See the China Story Yearbook 2014: Shared Destiny, Forum ‘Sandcastles in the South China Sea’, pp.78–81.) The Pentagon takes a dim view of China’s attempts to increase its strategic reach by creating what are in effect stationary aircraft carriers for the PLA, on land features claimed by other states.
Few expected Xi’s visit to break much ground. The two sides had clearly done a lot of work to agree on the boundaries of the scope of State-supported espionage, even if they remain hazy, and though they did not issue a fully joint text on the subject, there was substantial agreement in their separate publications. As for the Pacific, Xi stated China had no intention to militarise the South China Sea area. Yet Xi’s definition of ‘militarisation’ appears limited to the display of offensive capability; China claims it is acting to enhance capacity for national defence, as well as providing global goods in the form of crisis management capacity.
The US Freedom of Navigation Operations in the Spratly Islands have highlighted the tensions surrounding China’s efforts to become de facto leader of a region where the US has long been the dominant power (see Information Window ‘South China Sea and the US FONOP’ above). Nonetheless, neither side wants conflict and, despite outbursts of official rhetoric and the occasional sensational headline, extensive policy co-operation creates multiple avenues for dialogue, reducing the risks in times of crisis.
Diplomacy in North East Asia
In 2014, Xi shook Japanese Prime Minister Shinzō Abe’s hand. But in 2015, there was also much fist shaking. The official Xinhua News Agency described as ‘insincere’ the statement by Abe on the end of WWII in August, in which he expressed ‘remorse’ and pledged that Japan would ‘never again resort to any form of the threat or use of force as a means of settling international disputes’ and would ‘respect the right of self-determination of all peoples throughout the world’. However, he stopped short of issuing a clear apology.
For its part, at the military parade commemorating Japan’s surrender, China showcased its new Dong-Feng 26 (DF-26, 东风-26) missile, also known as the ‘Guam Killer’ for its ability to reach the island chain from Chinese territory. China, meanwhile, continued to patrol the seas around the Diaoyu/Senkaku Islands, which both sides claim, and Japan continued to scramble fighter jets in high numbers to prevent possible incursions by Chinese planes.
At the same time, there have been positive developments. Japan’s National Security Advisor Shotaro Yachi 谷内 正太郎 and Chinese State Councillor for Foreign Affairs Yang Jiechi 杨洁篪 co-chaired the first China-Japan High Level Political Dialogue in Beijing in July, affirming and acknowledging the ‘momentum’ for improvement in bilateral relations.
Yang made a reciprocal visit to Japan in October where he also met with Abe, laying the groundwork for a possible Leaders’ Summit. Yet the passage of a new security law by the Japanese Diet in July and Japanese protests to UNESCO in October over the inclusion of documents on the Nanjing Massacre in its ‘Memory of the World’ program restrained the pace of what is already a very slow thaw in relations.
Despite having resolved none of the issues that had blocked such a meeting since 2012, Li Keqiang met his Korean and Japanese counterparts for the first time in three years in Seoul on 1 November, signalling that China wants to continue dialogue, even if the underlying problems are tricky to deal with.
As for North Korea, Beijing remains concerned about Pyongyang’s nuclear program and supports sanctions as long as North Korea continues to violate UN resolutions. Yet Politburo Standing Committee member Liu Yunshan 刘云山 visited Pyongyang in October for a parade marking the seventieth anniversary of the Workers’ Party, carrying a supportive message from Xi Jinping and prompting speculation of a more senior visit.
Speculation cooled when the Moranbong ‘girl’ band, whose members are apparently hand picked by Kim Jong-un, visited Beijing two months later but then left suddenly, without performing and without explanation. This might have been because Xi Jinping decided not to attend the performance after Kim announced, only days earlier, that North Korea was ‘ready to detonate a self-reliant A-bomb and H-bomb’.
Rumours also circulated that the band had departed after a stand off regarding a song declaring Chairman Mao ‘the greatest on earth’ but ‘Great Leader Kim’ the ‘greatest in the universe’. Either way, relations continued to cool following a reported test of the hydrogen bomb at the start of 2016, and it is not clear how ties might recover. Since 2013, Xi Jinping has held six summits with South Korea’s President Park Geun-hye. He has never met Kim Jong-un.
… and in South East Asia
Xi and Li both visited the region, an important part of the ‘Maritime Silk Road’. But China’s continued, enthusiastic pursuit of island building in contested waters and dismissal of regional concerns meant that diplomatic gestures such as Xi’s visit to Vietnam in November, the first by a Chinese president in ten years, were not universally well received. The Vietnamese government, apparently divided between pro-US and pro-China factions, brutally suppressed some of the protests.
In June, the Chinese Foreign Ministry announced that it would stop reclaiming land in the South China Sea. At the same time, it said it would continue to construct facilities on the islands it had already built—some 1,170 hectares of land in total, according to Pentagon estimates.
By September, China had also completed construction of its first airstrip there, on Fiery Cross Reef. There are four other airstrips in the region, built by Vietnam in 1976, the Philippines in 1978, Malaysia in 1983, and Taiwan in 2006. The Chinese government has accused its critics of a double standard, given that other claimants to the Spratly Islands have also built islands—although only amounting in total to five percent of all the reclaimed land there, with China responsible for ninety-five percent. China’s new airstrip, at 3,000 metres, is more than twice as long as any of the others.
In November 2015, an arbitral tribunal facilitated by the Permanent Court of Arbitration (PCA) in The Hague decided that it did have jurisdiction to hear a case brought by the Philippines contesting various Chinese claims, including the nine-dashed line by which China demarcates its claim to sovereignty over all of the South China Sea’s land features on the map. China refuses to accept that this case has any legal basis, and doesn’t recognise the authority of the PCA. The tribunal’s decision, however, makes quite clear that the case can be heard, whether or not both parties agree to engage. China has always been deliberately vague about the legal basis of its own claims, preferring to assert ‘historical rights’. There is no basis under the UN Convention on the Law Of the Sea (UNCLOS) for a nation to claim territorial rights based on islands built on low-tide elevations unless they are on its continental shelf. By building and populating relatively large islands, China may be hoping to create a new precedent in its own interests.
China called the US FONOPS (see Information Window ‘South China Sea and the US FONOP’, pp.230–231) ‘illegal’ (under Chinese domestic law rather than UNCLOS) and a ‘threat to China’s sovereignty and security’. Other South China Sea claimant states kept quiet, failing to take take a unified position. China has successfully avoided multilateral discussion of the matter, though they appear more inclined to acknowledge that a solution will require discussion with ASEAN.
Most countries struggled to find a consistent and constructive China policy that would serve their policy interests in 2015. The then prime minister of Australia Tony Abbott crudely summed up a common (if rarely vocalised) attitude when he told German Chancellor Angela Merkel that Australians viewed China with ‘fear and greed’. For China’s neighbours, balancing independence and beneficial economic ties with China is a challenge, one thrown into relief by the OBOR Initiative. Nations less concerned by China as a potential security threat, such as in more distant Europe are nonetheless perturbed by ever-increasing restrictions on civil liberties. How to deal with a China that is rich, influential, yet not showing any trend towards becoming a liberal democracy is seen to violate human rights and is one of the most pressing diplomatic questions for the US and its allies.
The United Kingdom took a bold and opportunistic stance under the initiative of former chancellor George Osborne to court China, becoming its ‘best friend in Europe’. The UK was the first European country to ignore US lobbying and state its intention to become a founding member of the AIIB. Xi described the UK’s position as ‘visionary’ when he visited in October, although many commentators described it as embarrassing, and the US accused it of ‘constant accommodation’.
Britain has certainly taken a risk in alienating traditional allies: investment from China might be growing but it is still small at around three percent of Foreign Direct Investment (FDI) stock, as opposed to twenty-seven percent from the US, and China’s economic and political future is uncertain. However, it was interesting to see a new diplomatic approach, one with less hedging, working with China in pursuit of UK interests where possible, and leaving space to defend universal values where appropriate. How best to interact with China on the international stage will depend on how China’s domestic struggles play out. It is too early to tell.
In July 2016, an arbitral tribunal at the Permanent Court of Arbitration in The Hague issued a ruling in Manila’s case against claims made by Beijing in the South China Sea. The tribunal was established according to UNCLOS provisions and its ruling was final and binding. The ruling dismissed most of Beijing’s claims, including to ‘historic rights’ and any validity of the nine-dashed line. It also found that Beijing had violated the traditional fishing rights of Filipinos around Scarborough Shoal, and the sovereign rights of the Philippines over living and non-living resources.
China has angrily refused to recognise the validity of the court or its ruling. Indeed, there is no enforcement mechanism. China has also conducted a vigorous diplomatic campaign to reduce international pressure to abide by the ruling. President Duterte of the Philippines has called for bilateral talks. China announced that a senior officials meeting with ASEAN on 16 August had achieved consensus on achieving a draft Code of Conduct by mid-2017.
Award on Jurisdiction and Admissibility for PCA Case No 2013-19 in the Matter of an Arbitration before an Arbitral Tribunal Constituted Under Annex VII to the 1982 United Nations Convention on the Law of the Sea between the Republic of the Philippines and the People’s Republic of China’, online at: http://www.pcacases.com/web/sendAttach/1506