China and the new global geopolitics

The Peo­ple’s Re­pub­lic of China is the most pop­u­lous coun­try on Earth and ac­counts fro around 18% of the world’s pop­u­la­tion. It is also the largest econ­omy (ac­cord­ing to GDP based on pur­chas­ing power par­ity), ahead of the United States, India, Ger­many and Japan, al­though in terms of GDP per capita (16,400 dol­lars in 2020), which is a bet­ter mea­sure of stan­dard of liv­ing, it falls to 102nd place, far be­hind most Eu­ro­pean coun­tries. How­ever, it has be­come the world’s lead­ing ex­porter in re­cent years, ahead of the United States, Ger­many, Japan, France and the United King­dom, and the sec­ond largest im­porter in the world, be­hind only the United States and ahead of Ger­many, France, Japan and the United King­dom.

The sit­u­a­tion con­trasts with – or is the re­sult of, de­pend­ing on how you look at it – the fi­asco of the Great Leap For­ward (1958-1962) and the Cul­tural Rev­o­lu­tion (1966-1976), the lat­ter re­sult­ing in a deep eco­nomic stag­na­tion and the deaths of mil­lions of peo­ple, and forc­ing a pro­found mod­i­fi­ca­tion of eco­nomic guide­lines fol­low­ing the death of Mao Ze­dong (1978). Change came in the form of Deng Xi­aop­ing (1978-1997), who had sur­vived the purges and, to Wash­ing­ton’s sat­is­fac­tion, pro­moted the cre­ation of “spe­cial eco­nomic zones” that en­joyed greater free­dom of trade with for­eign coun­tries, im­port­ing West­ern tech­nol­ogy and for­eign in­vest­ment, while strength­en­ing the pre-em­i­nence and lead­ing role of the Chi­nese Com­mu­nist Party. Over 10 years, China’s GDP dou­bled and the econ­omy grew at an an­nual rate of be­tween 9% and 11%. These were the foun­da­tions of today’s eco­nomic power, de­spite post-Covid-19 chal­lenges. Deng be­lieved that two eco­nomic sys­tems could co­ex­ist under a sin­gle po­lit­i­cal sys­tem. It is the same prin­ci­ple, “one coun­try, two sys­tems”, that it ap­plied in order to achieve the rein­cor­po­ra­tion of Tai­wan and to agree with Mar­garet Thatcher on the trans­fer of sov­er­eignty from Hong Kong.

Since the be­gin­ning of the sec­ond decade of this cen­tury, Xi Jin­ping has held max­i­mum power in the coun­try (Pres­i­dent of the Re­pub­lic and Sec­re­tary Gen­eral of the Com­mu­nist Party) and will be able to do so for more than two terms be­cause, in ac­cor­dance with the 2018 con­sti­tu­tional amend­ment that abol­ished the lim­i­ta­tion, this was ap­proved at the party’s 20th Con­gress on Oc­to­ber 16. Xi has re­mained loyal to Deng’s model and ex­panded it, pro­ject­ing China’s eco­nomic, com­mer­cial and fi­nan­cial power around the world. At the same time, he con­tests North Amer­i­can hege­mony and the in­sti­tu­tions of eco­nomic and po­lit­i­cal gov­er­nance aris­ing from the Bret­ton Woods Con­fer­ence, ob­jec­tives he shares with Vladimir Putin’s Rus­sia. How­ever, Chi­nese diplo­macy is more so­phis­ti­cated and less ag­gres­sive: in the South China Sea, it is push­ing the mech­a­nisms of hy­brid war­fare – in­clud­ing mil­i­tary ma­noeu­vres, oc­cu­pa­tions of arch­i­pel­a­gos and the cre­ation of ar­ti­fi­cial islets – to keep the con­flict dor­mant, while all the time on the verge of war. Bei­jing’s at­ti­tude to­wards Tai­wan is very dif­fer­ent, how­ever, as it con­sid­ers this a mat­ter of do­mes­tic pol­icy. The is­land was the last strong­hold of the na­tion­al­ist troops of Chi­ang Kai-shek’s Kuom­intang party, and the only op­tion en­vis­aged by the Com­mu­nist Party, which has never recog­nised Tai­wan’s in­de­pen­dence, is re­uni­fi­ca­tion. This sum­mer’s visit to Taipei by US De­mo­c­ra­tic Con­gres­sional Leader Nancy Pelosi sparked ten­sions in re­la­tions be­tween Bei­jing and Wash­ing­ton and mil­i­tary ma­noeu­vres by the two pow­ers in the re­gion.

Bei­jing’s strat­egy ini­tially de­pends on fi­nanc­ing the con­sol­i­da­tion of BRICS (Brazil, Rus­sia, India, China, South Africa) and its ma­jor­ity con­tri­bu­tion to the cre­ation of the New Bank of De­vel­op­ment (NBD, based in Shang­hai) in 2013, which ex­ists out­side the World Bank and the In­ter­na­tional Mon­e­tary Fund. Ar­gentina, Iran, Egypt, Saudi Ara­bia and Turkey have shown in­ter­est in join­ing the BRICS. Through the pro­mo­tion of greater co­op­er­a­tion on eco­nom­ics, pol­i­tics, mil­i­tary and in­ter­na­tional se­cu­rity, Bei­jing also aims to trans­form the Shang­hai Co­op­er­a­tion Or­gan­i­sa­tion (SCO), which in­cludes China, Rus­sia, Uzbek­istan, Kaza­khstan, Tajik­istan, Kyr­gyzs­tan, India, Pak­istan and Iran, and pro­poses the cre­ation of a sin­gle cur­rency for the group to be­come a “con­cert of great non-West­ern pow­ers”.

In 2013, Ji Jin­ping an­nounced the Silk Road Eco­nomic Belt (SREB) pro­ject, which pro­motes con­nec­tiv­ity be­tween par­tic­i­pat­ing coun­tries and en­cour­ages Chi­nese in­vest­ments to build in­fra­struc­ture, often re­lated to the ex­trac­tion of hy­dro­car­bons and min­er­als, with­out ex­ces­sive sen­si­tiv­ity to en­vi­ron­men­tal stan­dards, and which at the local, state level often re­sults in cor­rup­tion and in­debt­ed­ness. Ear­lier this year, it pre­sented a new strate­gic frame­work, the Global Se­cu­rity Ini­tia­tive, to fos­ter bi­lat­eral and mul­ti­lat­eral re­la­tions with the Global South (South­east Asia, Africa and Latin Amer­ica), which is where the main Chi­nese in­vest­ments are con­cen­trated.

China’s strat­egy de­pends on weav­ing a net­work of al­liances broad enough to de­velop par­al­lel global gov­er­nance and con­front, if nec­es­sary, any pos­si­ble sanc­tions from the West. Along these lines, it is worth not­ing the strength­en­ing of bi­lat­eral re­la­tions with Saudi Ara­bia, Venezuela, Iran and Pak­istan. In this con­text, Rus­sia’s in­va­sion of Ukraine has been an in­con­ve­nience, as In­dian prime min­is­ter Naren­dra Modi, and, more dis­creetly, Ji let Putin know at last month’s SCO sum­mit in Samarkand. This high­lights the asym­me­try of re­la­tions be­tween Moscow and Bei­jing, de­spite the “pro-Russ­ian neu­tral­ity” ex­hib­ited since last Feb­ru­ary. China has pro­vided Rus­sia with eco­nomic sup­port, while tak­ing ad­van­tage of falling prices of Russ­ian gas and oil with falling West­ern de­mand. In short, as Alexan­der Gabuev (For­eign Af­fairs, Au­gust 2022) pointed out, un­like seven decades ago, when Mao went to Moscow to visit Stalin, China today has a more ro­bust and dy­namic econ­omy, and bet­ter tech­no­log­i­cal and more global po­lit­i­cal and eco­nomic in­flu­ence than Rus­sia. This asym­me­try will be even more pro­nounced in the com­ing years, since Putin’s regime de­pends on Bei­jing for its sur­vival.

fea­ture in­ter­na­tional