The New Chinese Foreign Policy
By Yan Xuetong
By Yan Xuetong
In March, China’s top diplomat, Yang Jiechi, made headlines when he told U.S. officials at a summit in Alaska that they did “not have the qualification . . . to speak to China from a position of strength.” Even after years of heightened tensions between Beijing and Washington, the remark seemed unusually harsh, especially coming from a seasoned diplomat. The setting, too, was noteworthy: Yang was speaking at the first high-level diplomatic meeting between China and the United States since U.S. President Joe Biden entered the White House. It seemed like an unmistakable warning to the new administration.
At home, Yang’s comment circulated widely on social media, resonating with the belief of many Chinese that their country has found its voice on the global stage. International media read the statement as reflective of a post-pandemic China: ambitious and outspoken in its claim to global leadership.
Yang’s statement did, indeed, reflect a paradigm shift underway in Beijing: China believes that its rise to great-power status entitles it to a new role in world affairs—one that cannot be reconciled with unquestioned U.S. dominance. Beijing’s initial hopes that a Biden administration would ease tensions with China have been dashed. Instead, it views Biden’s attempts at isolating China diplomatically as a serious threat and is working on multiple fronts to make the country less vulnerable to U.S. aggression and pressure.
Beijing’s newfound confidence does not mean it will challenge Washington in every single domain. China rejects U.S. leadership on some issues, but as a developing country, it will limit competition to areas in which it feels it has an advantage, such as the fight against COVID-19, poverty reduction, trade, international infrastructure and development, digital payment systems, and 5G technologies, among others. Across the board, however, a post-pandemic China will make its voice heard with greater determination than before and will push back forcefully against any attempts to contain it.
CHINA’S DUAL IDENTITY
To be the world’s “largest developing country” (a popular moniker in Beijing) once meant that China’s capabilities surpassed those of its immediate peers. Nowadays, it means the country’s power is second only to that of the United States. Consider the sharp contrast between Chinese success and American failure in the fight against COVID-19: China suffered the least among all major powers during the pandemic and is the only major economy to have grown over the past year. By the end of 2020, its GDP had reached 71 percent of U.S. GDP, up from 66 percent in 2019, and Chinese policymakers are confident that they will close the remaining gap in the coming decade. In their eyes, China has gone through the stages of standing up and getting rich and is now advancing to the stage of becoming strong. The U.S.-led unipolar order is fading away, its demise hastened by China’s rise and the United States’ relative decline. In its place will come a multipolar order, with U.S.-Chinese relations at its core.
Until recently, Beijing viewed this once-in-a-century shift with unalloyed optimism, predicting a “bright future for Chinese national rejuvenation.” The turmoil of the Trump years—especially Washington’s decision in 2017 to label China a “strategic competitor”—caused Chinese officials to dial down their enthusiasm. China’s most recent five-year plan strikes a more sober tone, listing opportunities in the realm of technology and development and warning of the instability fueled by “unilateralism, protectionism, and hegemonism.” Yet the bottom line, in Beijing’s eyes, remains the same: China has become a global power that can meet the rest of the world on an equal footing.
China’s global reach still has its limits. Despite being a major power, China also thinks of itself as a developing country—and rightly so, considering that its GDP per capita remains far behind those of advanced economies. (The International Monetary Fund puts China’s 2020 GDP per capita at only $10,484, compared with $40,146 for Japan, $45,733 for Germany, and $63,416 for the United States.) The “developing country” label is also meant to signal Beijing’s geopolitical alignment: even if China catches up with the West economically, the thinking goes, its loyalties will still lie firmly with the developing world—it will, as Chinese President Xi Jinping put it in a 2018 speech, “forever belong to the family of developing countries.”
China will limit competition to areas in which it feels it has an advantage.
This dual identity will color all aspects of China’s post-pandemic foreign policy. As a developing country, China still lacks the resources required of a true world leader, with globe-spanning responsibilities, especially in the military realm. As a great power, however, it will not follow the United States’ lead, and on some issues, competition with Washington will be inevitable.
Take the issue of ideological rivalry. On the one hand, China is anxious not to frame relations with the West as a new Cold War: leaders in Beijing believe that Soviet-style ideological expansionism could trigger a backlash that might hinder their country’s continued growth, and they do not expect their ideology to become as popular as Western liberalism is today—hence their insistence that China is a developing country “with Chinese characteristics,” a phrase meant to imply that its political system and governance model cannot merely be exported to other countries.
On the other hand, China will try to shape an ideological environment favorable to its rise, pushing back against the notion that Western political values have universal appeal and validity. The United States defines democracy and freedom in terms of electoral politics and individual expression, for example, whereas China defines them in terms of social security and economic development. Washington will have to accept these divergences of opinion rather than try to impose its own views on others.
The same conviction will animate China’s post-pandemic diplomatic strategy. Contrary to the common perception, Beijing does not reject multilateral rules and institutions out of hand. It will not, however, accept rules that the United States makes without consultation with China. Instead, Beijing’s objective is for international norms to rest on a truly inclusive multilateralism. Such is the idea behind the China-based multilateral forums that Beijing has been building with a host of states and regions, such as its cooperation forums with African, Arab, Latin American, Pacific island, and Southeast Asian states. From other major powers, meanwhile, Beijing expects treatment based on equality and mutual respect, as illustrated by its assertive retaliatory sanctions strategy. When the Trump administration imposed sanctions on 14 high-ranking Chinese officials over the disqualification of some Hong Kong lawmakers, China took revenge with sanctions on 28 American officials, including then Secretary of State Mike Pompeo. Likewise, Beijing quickly retaliated against British and EU sanctions over the Xinjiang issue. On both of these matters, the Chinese government considers any sanctions or criticism of its policies as interference in its internal affairs.
China’s economic policies are shifting, too, impelled both by the pandemic, which revealed the vulnerability of global supply chains, and by U.S. attempts at economic decoupling. In fact, the Chinese government believes that protectionism, a slowing world economy, and shrinking global markets will outlast the pandemic. Under a new “dual circulation” strategy, which was unveiled at a high-profile Chinese Communist Party meeting in May 2020, Beijing therefore aims to lessen its dependence on foreign markets. The goal is to shore up China’s massive internal market and to build robust domestic chains of supply, distribution, and consumption, thus reducing the country’s vulnerability to outside economic pressure, especially from the United States. Science and technology will be at the center of this effort, laying the groundwork for future development. The resulting domestic boom, it is hoped, will in turn improve economic relations with other states and aid the recovery of the world economy.
Beijing will also seek to reduce its exposure to U.S. financial sanctions, including by promoting the use of the renminbi in foreign trade and investment. Last year, it started trials of a digital currency in a handful of large cities, an innovation that could one day allow China and its business partners to conduct international transactions outside SWIFT, the financial messaging system, which is under de facto U.S. control and a major source of American geopolitical leverage. China will, of course, not turn inward altogether: the Belt and Road Initiative, Beijing’s massive global infrastructure campaign, will continue, although progress has been slow during the pandemic. Since the “dual circulation” strategy enshrines the domestic market, and not global linkages, as Beijing’s primary political focus, the BRI’s projects will henceforth be based more on market demand than on political considerations. China will also continue to seek technological cooperation with other countries, provided they can resist U.S. pressure to decouple from China on this front.
China’s military strategy, by contrast, will remain largely unchanged in the post-pandemic world. Beijing seeks to turn the People’s Liberation Army into a world-class fighting force ready for war at any moment, emphasizing quality over quantity, cyber-capabilities over conventional prowess, and artificial-intelligence-based weapons systems over individual combat skills. Yet the PLA’s mission will remain one of deterrence, not expansion. China’s 2021 military budget, albeit larger than that of other major powers, is less than a third of what the United States spends on defense. On top of this budget disparity, China’s military lacks experience: the PLA has not been involved in a shooting clash since 1989 and has not fought a real war since 1979. As a result, Beijing remains wary of direct military confrontations and will continue to reject military alliances, which could drag it into an unnecessary war. For the same reason, China has been careful not to let territorial conflicts in the South China Sea and on the Sino-Indian border escalate into live-fire clashes.
A HEALTHY COMPETITION
Biden’s election initially raised hopes among Chinese officials and media that Washington’s China policies were due for a fundamental rethink. That optimism quickly faded. Instead of a radical break, Biden’s policies to date are in many ways a continuation of his predecessor’s confrontational approach. As a result, U.S.-Chinese relations are unlikely to grow any less tense or competitive than they have been in recent years.
The Biden administration’s forays into exclusive multilateralism—that is, its attempts to form issue-based coalitions in opposition to China on technology and human rights—are bound to be a particular source of tension in the years ahead. Beijing views this as the most serious external threat to its political security and the biggest obstacle to its national rejuvenation. U.S.-led anti-China technology coalitions are an obstacle on China’s path to technological superiority, and similar ideological coalitions will encourage secessionists in Hong Kong, Taiwan, Tibet, and Xinjiang. Both involve core interests on which China will not make concessions.
To counter U.S. attempts at forming such coalitions, Beijing has already begun shoring up its bilateral strategic partnerships. Within weeks of the public clash between American and Chinese representatives at the Alaska summit earlier this year, Beijing embarked on an extensive diplomatic campaign, dispatching its defense minister to the Balkans and its foreign minister to the Middle East, where the latter official signed a 25-year strategic cooperation agreement with Iran and pledged $400 billion in Chinese investment in the country. At home, China received foreign ministers from Indonesia, Malaysia, the Philippines, Singapore, and South Korea and signed a joint statement with Russia that, in a departure from tradition, omitted the usual assurances that Chinese-Russian cooperation does not target any third party. (In the years ahead, Moscow is likely to be an important partner of Beijing’s in pushing back against the politicization of human rights issues and in promoting alternative models of democracy and nonideological multilateralism.) Xi also sent the North Korean leader Kim Jong Un a message stating his willingness to further consolidate Beijing’s relations with Pyongyang.
A post-pandemic China will make its voice heard with greater determination than before.
Beijing still hopes it can confine tensions with Washington to the economic realm and avoid an escalation to military clashes. Yet the risk of a conflict over Taiwan, especially, is growing. Beijing’s most recent five-year plan reiterates its commitment to pursuing peace and prosperity across the Taiwan Strait, a policy that has long prevented a potential U.S.-Chinese war over the island. Although China has not given up the principle of peaceful unification to date, it may abandon it if Taiwan announces de jure independence. The more other countries support Taiwan’s secessionist policies, the more the PLA will carry out military exercises to deter Taiwan. In the meantime, Beijing hopes to reach a tacit understanding with Washington that maintaining peace in the Taiwan Strait is a shared interest.
This is not to suggest that cooperation with Washington is out of the question. Beijing has expressed its willingness to play an active role in reforming global governance regimes, in aiding the global economy’s post-pandemic recovery, and in tackling transnational challenges in concert with Washington. Xie Zhenhua, China’s climate envoy, has already met with his U.S. counterpart, John Kerry. Chinese Foreign Minister Wang Yi has signaled that China does not oppose the Biden administration’s efforts to relaunch the 2015 Iran nuclear deal, and U.S. and Chinese diplomats have discussed plans for each side to recognize the other’s COVID-19 vaccinations for the purposes of overseas travel. Meanwhile, China is open to trade negotiations based on the so-called Phase One agreement signed by the Trump administration in 2020, and even some U.S. officials, such as Tom Vilsack, the agriculture secretary, have noted that China has so far made good on the promises made in that agreement.
Even if competition carries the day, it would be best thought of as a race, not a boxing match: each side is doing its best to get ahead, but neither has any intention of destroying or permanently changing the other. In 2019, prior to becoming high-level national security officials in the Biden administration, Kurt Campbell (the National Security Council’s top Asia official) and Jake Sullivan (now the national security adviser) argued as much in these pages. “The basic mistake of engagement,” they wrote, “was to assume that it could bring about fundamental changes to China’s political system, economy, and foreign policy.” A more realistic goal, they continued, was to seek “a steady state of clear-eyed coexistence on terms favorable to U.S. interests and values.” That view is not too far removed from Wang’s hope that both sides should engage in “healthy competition” based on “improving oneself and illuminating the other side, rather than mutual attacks and a zero-sum game.” If neither Beijing nor Washington intends to subjugate the other, their rivalry will be fierce—but milder than the existential great-power struggles of the twentieth century.
How will such competition play out in practice? It will, for one, unfold on novel battlegrounds, chief among them cyberspace. As the digital sphere takes over more and more of people’s lives, cybersecurity will become more important than territorial security. Already, the digital economy is growing rapidly as a share of major powers’ GDPs, making it an essential source of national wealth. The race for leadership on 5G and 6G telecommunications networks will increasingly shape the contest, and for the time being, China seems to be in the lead. By February 2021, Chinese companies, including the technology giant Huawei, accounted for 38 percent of approved 5G patents, compared with around 17 percent for U.S. companies. (In other areas, however, American digital platforms remain ahead of their Chinese counterparts, and U.S. digital platforms account for some 68 percent of the global digital economy in terms of market capitalization, compared with just 22 percent for Chinese companies.)
Meanwhile, international cooperation will increasingly take the form of issue-specific coalitions instead of truly international (or even regional) institutions. At times, Beijing and Washington might belong to some of the same clubs: for example, when it comes to the nonproliferation of cyberweapons and certain kinds of artificial intelligence tools. In the long run, the digital superpowers could even have a shared interest in introducing and enforcing some international tax regulations to protect their own companies from being overtaxed by other countries. For the most part, however, China and the United States will build rival teams, with other countries deciding which to join on a case-by-case basis, depending on which arrangement best serves their national interests. Most governments will welcome this trend, having already adopted hedging strategies to avoid picking sides between the two powers.
Of course, a club-based international system will bring complications of its own: a country that joins some coalitions led by Washington and others led by Beijing will be a less trustworthy partner for both powers. It could also become common for members of the same coalition to punish one another for actions required by their membership in other clubs. For instance, both Australia and China are members of the Regional Comprehensive Economic Partnership, a trade agreement among a dozen states in the Asia-Pacific, yet disputes over human rights recently led Australia to cancel its BRI deal with China, which responded by suspending an economic dialogue between the two countries. Likewise, eastern European states have often told Chinese diplomats that their membership in the EU forces them to side against China on political matters. The same countries, however, cooperate with China on infrastructure investment and technology, at the risk of violating EU regulations, citing their participation in the Cooperation Between China and Central and Eastern European Countries, a diplomatic forum in the region initiated by China.
Such conflicts are likely to heighten political instability and accelerate the trend toward deglobalization in the decade ahead, but they are preferable to a world split into rigid geopolitical blocs. As long as individual states remain members of clubs on both sides of the divide, it will not be in their interest to throw in their lot with one side only. This bipolar configuration will cause some tension, but on the whole, it will be far less dangerous than all-out, Cold War–style competition.
China’s post-pandemic foreign policy is just beginning to take shape. Beijing has always adjusted its policies to shifting domestic and foreign circumstances, following Deng Xiaoping’s approach of “crossing the river by feeling the stones.” The coming era will be no different: achievements and failures will inform China’s path and choices. The backdrop to these adjustments, however, will be a radically altered global landscape, in which unilateral decisions by Washington and the various alliances and issue-specific coalitions it leads will no longer be as viable as they once were. As many states prepare for a return to life after the pandemic, they should come to terms with this new reality.
This Article Published in Foreign Affairs July August Edition 2021