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Project of the century: How the Belt and Road initiative will impact the Eurasian region

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In 2013, China announced the creation of the Silk Road Economic Belt and the Maritime Silk Road of the 21st century – this initiative of “The Belt and Road” was designed to turn Asia and Europe into a single economic region. It focuses on the industries that are important for the internal growth in China and, at the same time, involves over 70 countries with a total population of 4.4 billion. Today, the initiative has already changed the economy of Eurasian countries significantly. Over the last seven years, the region got approximately $98 billion in investments in order to implement 168 projects.

What’s in it for China?

In recent years, China’s economic growth has slowed from double-digits to 6.4% in 2017. The wide-reaching economic model formerly in use (based on cheap labour, gross investment, and exports) has faced a number of serious challenges.

The country has to overcome industrial overproduction – steel making in China is a great example of this challenge. According to official data, China’s production capacity amounts to 1.1 billion tons per year, while internal demand is approximately 700 million tons, and China’s export partners cannot consume the remaining 400 million tons. The country needs to be provided with an access to new markets and to launch new resource-intensive projects.

In addition, Chinese authorities have been facing the problem of a sharp increase in labour cost. We live in a world where the average labour cost in China ($758) is higher than in Russia ($615). And it causes many multinational corporations to move their manufacturing facilities to other South-East Asian countries, such as Vietnam. China is losing its historical competitive edge – cheap labour, and analysts are increasingly talking about the risk of “stalling” in the trap of average income.

Furthermore, China needs to reduce its debt burden. The country is one of the world leaders in joint debt rating. In 2016, the total debt load in China amounted to $27 trillion, which equals 254% of the country’s GDP. Simultaneously, the amount of “bad” debt in the banking system is growing.

Social inequality and poor ecology exacerbate the situation further. For example, 1% of the wealthiest Chinese control roughly 33% of total national wealth, while 25% of the poorest Chinese possess just a mere 1%. Beijing sees as little as 124 clean days every year, while total environmental destruction amounts to 3.5-5% of China’s total GDP. In addition to a number of internal reforms adopted to create an economic model focused on domestic consumption, the Chairman of the People’s Republic of China, Xi Jinping, proposed the “Belt and Road” initiative. Among other things, it is designed to stimulate domestic economic growth through external forces – ensuring access to Chinese products in new sales markets, natural resources, integration into complex production chains, exchange of advanced technologies, and the establishment of new high-tech manufacturing facilities in China. To do this, Chinese authorities are attempting to create a large-scale platform that will enable the expansion of trade and investment relationships, as well as technological cooperation between China and Central Asia, Europe, and Africa. This is believed to be a way for China to gain an access to the tools needed to overcome the economic development challenges described above.

China helped create powerful financial institutions in order to finance projects within the framework of the Belt and Road initiative, such as the Asian Infrastructure Investment Bank with $100 billion in capital, and the Silk Road Foundation ($40 billion in capital). The New Development Bank (or BRICS Bank) is also seen as an important element of the Belt and Road projects’ financial infrastructure, which will also involve the participation of the largest Chinese state-owned banks and development institutions. The total budget for projects under the Belt and Road initiative is estimated at an astronomical $1.3 trillion. The bulk of these investments is expected to be sent to the countries of the Eurasian Economic Union, including Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan, which are key to the implementation of The Belt and Road initiative.

How will this Chinese initiative affect other countries?

The Belt and Road initiative will stimulate major infrastructure changes not only in China, but also in other countries through which the New Silk Road passes. There are expectations for the construction of new roads and railways, power plants, ports and fuel pipelines. The Chinese investments are expected to accelerate the growth of the economies of the countries participating in the Belt and Road initiative.This is precisely what is meant by mutually beneficial cooperation, or the “win-win” model, which Chinese officials often reference. Many believe in the efficacy of such a model. A total of 69 countries and international organizations have entered into agreements with China to cooperatively implement the framework of The Belt and Road initiative. In practice, cooperation is developing in several key areas.

Trade

In the long run, the Chinese government is striving to create a single integrated economic space, with the ultimate goal of establishing a free trade zone. Already, by the end of 2017, China’s trade turnover with the countries that signed cooperation agreements within the framework of the Belt and Road initiative exceeded $800 billion. To further integrate the economies of Asia and Europe, the creation of six economic corridors has been proposed. The main routes of the Silk Road Economic Belt will connect China with Mongolia and Russia, Indo-China, Pakistan, the Republic of Bangladesh, India and Myanmar, as well as Central and Western Asian countries. Today, goods from China are most commonly delivered by sea, taking approximately 45 days. The construction of modern highways and high-speed railways will shorten this delivery period to 10-15 days.

The most important project in this respect is the largest Central Asian land port – Khorgos. This facility is strategically located in Kazakhstan in the Free Economic Zone called “Khorgos – Eastern Gate”, which also includes logistics and industrial zones. China has invested over $3 million in this project, which saw the first trains come to port in 2015. It is expected that the majority of cargo trains traveling between China and Europe will pass through it in the future.

The formation of a modern transport and logistics infrastructure in the countries of Central Asia, the Caucasus and, even, Europe is a key component for the development of these national economies. Such projects enable China to unload their excess production capacity and deliver domestic goods to foreign markets. Not only large state-owned companies, but small and medium-sized businesses stand to gain as they provide services for complex projects implemented under the framework of the Belt and Road initiative. For example, since 2011 Chinese and European cargo trains have traveled through 28 cities in 11 European countries. Currently, there are more than 4,000 trips per year, and this number is expected to increase to 5,000 by 2020.

Energy

The Belt and Road initiative also takes into account the need to create new energy capacities – construction of interstate power lines, pipelines and gas pipeline systems, and the development of new energy-deposit fields.

One of the most promising projects in this area is Yamal LNG, the Russian liquified natural gas plant that was commissioned at the end of last year. The project’s budget is estimated at $27 billion with approximately $20 billion provided by Chinese banks, led by the Silk Road Foundation as the primary investor.

Additionally, the Power of Siberia gas pipeline is expected to be complete by the end of 2019 – it will enable Russia to supply China with 38 billion cubic meters of gas per year for 30 years. The pipeline, traversing the Republic of Sakha (Yakutia), Irkutsk and Amur regions, will become the largest gas transportation system in Eastern Russia, thanks to over $70 billion in investment by Russia and China.

Tourism

According to online companies Ctrip and Alibaba, Chinese citizens took 129 million tourism trips abroad last year, spending a total of $118.4 billion. Implementation of the “One Belt, One Road” strategy will contribute to the influx of Chinese tourists to countries in the Eurasian Economic Union. Indicators of that influx are already growing. For example, last year a record number of Chinese tourists visited Russia – 1.5 million. However, it is important to note that the bulk of revenue generated as a result of  serving Chinese tourists goes to Chinese businesses, not Russian ones, as Chinese travelers tend to buy tour packages and order guide services from home, paying either in cash or through national Chinese payment systems.

Education

The Silk Road Economic Belt also fosters business cooperation between China and other Eurasian countries in the field of education. Today, 25% of all international students in Russia come from China. This indicates an especially high rate of international education collaboration with China as Russia’s share is a mere 2% of all Chinese students studying abroad (most still prefer European and American universities). China and the EEU countries are trying to solve the problem of a personnel shortage in the fields of economics, law and business, increasingly developing joint educational programs. For example, the Moscow School of Management SKOLKOVO runs specialized “Understanding Russia” programmes for Chinese entrepreneurs on how to effectively conduct business in Russia. Over 300 business leaders from China have been trained in this programme. In addition, in November, 2018 the Moscow School of Management SKOLKOVO and the business school of the Hong Kong University of Science and Technology will launch “EMBA for Eurasia”, a cooperative programme designed for business leaders in Eurasia.

Innovations

The most widely-accepted theories of economic growth see technological development as the main driver of modern economic growth. Within the Belt and Road initiative, a special role is played by the sharing of technologies and technological innovations. As of today, 75 industrial parks are under construction as a part of the initiative.

In 2015, a Chinese holding bought 65% of YotaPhone, the Russian smartphone manufacturer. China also actively collaborates with other Eurasian countries on innovative projects in the fields of biotechnology, photonics, biomedicine, LED, food and consumer goods. In essence, it means that “One Belt, One Road” propels the industries of the Eurasian region to a new technological level. For example, several organizations from Belarus, Kazakhstan and Russia are developing an innovative project to cool heavy-duty machinery – the so-called “double phase-shift cooling system” is being developed on a super-computer technology platform.

Work is being done in other areas as well, as seven belts are planned to be put in place, including financial and agricultural ones. In total, roughly one thousand different projects are expected to be implemented across different countries in the long term.

What are the barriers for implementing the strategy?

The Belt and Road is an initiative, not a project, meaning it has no defined goals or deadlines. China first mentioned its intention to establish the Silk Road Economic Belt and the Maritime Silk Road of the 21st century back in 2013, yet today, five years later, there is still no official information about the total number of projects or participating countries that should be involved, rendering the strategy somewhat amorphous. Unless the Belt and Road initiative is “institutionalized,” business can not use standard project and investment approaches, which makes it difficult to implement the overarching plan.

Furthermore, China is reducing investment in the Eurasian region. In 2013, the country allocated as much as $18 billion toward the project, but cut this amount down to $10 billion in 2016. If China had not invested in Iran’s nuclear program that year, this amount would have dropped to $5 billion. Such an approach makes predicting future investments challenging. The internal economic and political dynamics of China contribute to the challenge of forecasting the trajectory of the initiative – public and private investment banking institutions have begun to scrutinize these investment projects, as too much money was spent inefficiently or lost, drawing the attention of Chinese regulatory bodies.

Another important roadblock is the fact that some of the announced projects have not been a success. For example, the construction of a high-speed railway between Moscow and Kazan, which was originally designated as one of the priority projects for the Belt and Road, stalled. The construction of this Russian segment was supposed to be the first stage in building a railway between Moscow and Beijing, which was to be followed by an even more ambitious “Eurasia” railway project, connecting Beijing, Moscow and Berlin. Unfortunately, under current financial conditions, these projects are not economically viable, which halted their development at the feasibility study stage. This is a clear example of collaboration in which strategic ambitions outpace, or fail to take into account, the economic and investment feasibility of the Belt and Road projects.

Nevertheless, the initiative has emerged at the right time. At a time when protectionism is gaining momentum in international trade, China is driving an expansion of free market values, simplified customs and visa procedures, and the creation of transportation and logistics infrastructure that will ensure the quick and easy delivery of goods to new markets. This approach enables multilateral development at the domestic level and eliminates barriers to business that already seem archaic in the global world of the 21st century.

Head of China Unit of SKOLKOVO Business School, Representative in China and an Expert at EMBA for Eurasia by HKUST and SKOLKOVO programme

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How to turn the page on WW II in Asia

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In the run-up to the 74th anniversary of the end of World War II in the Pacific Russia and Japan are recalling the most overarching problems of their  relations – namely the so-called territorial issue and the conclusion of a formal peace treaty between the two countries.

Progress in and an ultimate solution of these lingering problems is quite possible in the foreseeable future, but only if there is goodwill and mutual desire for a compromise. There is one thing we should keep in mind, however, and this is the root cause of these problems, which has to do with national and regional security. Indeed, the current instability in Northeast Asia and the Asia-Pacific region, unresolved territorial disputes and conflicts, the lack of regional security mechanisms and cooperation are rooted in the events of the second half of the 20th century and related historical and geopolitical contradictions.

The territorial disputes between China and Japan, Japan and South Korea, Japan’s territorial claims to Russia over the North Kuril Islands, and other conflict situations in the region essentially stem from the different interpretations of the political and international legal framework for ending WW II (conflicting references to the Cairo, Yalta and Potsdam declarations by the victorious powers, the San Francisco Peace Treaty, etc.).  

In its claim to the southern islands of the Kuril range, Tokyo refers to the Soviet-Japanese Declaration of October 19, 1956 “On ending the state of war between the two states and restoring diplomatic and consular relations”, according to which the Soviet Union agreed to eventually hand the Shikotan and Habomai Islands over to Japan, but only on conditions, which were never met.

The Tokyo Declaration stipulated, among other things, that the two islands’ transfer to Japan would happen only after the two countries had signed a peace treaty. The Soviet Union also protested against the presence of US military bases on Japanese territory.

The biggest hurdle barring progress on the issue of the South Kuril Islands and the conclusion of a peace treaty is Japan’s refusal to take into account Russia’s strategic concerns about the status which the four islands of the South Kuril range will have if they ever come under Japanese control.

Russia wants guarantees of the neutral status of these islands and the absence of US military bases there. Japan has repeatedly promised that, but the problem is that under the terms of the US-Japanese Security Treaty Tokyo cannot do this despite repeated parliamentary attempts to propose a new interpretation of the Treaty that would ensure Japan’s greater independence from Washington. This could prove an insuperable obstacle though.

We should also bear in mind the impact the active efforts bent by experts in both countries to influence public opinion concerning the issue of the islands and the peace treaty. For decades, historians and experts have been trying to prove the correctness of their own approach to the problem. In Russia, they are often guided (and not without a reason) by the motto “We will not give up an inch of our homeland!”

They argue that that under no circumstances should Russia cede its territories, be it for geopolitical or other reasons. However, in an effort to solve complex interstate disputes, diplomats have at various times employed different approaches. Here are some recent examples of this.

In keeping with the terms of a Russian-Chinese agreement signed in Beijing in October 2004, the Tarabarov Islands and parts of the Bolshoi Ussuriysky island in the Amur riverbed with a total area of 174 square kilometers were handed over to China as part of the demarcation of the Russian-Chinese border in the Khabarovsk region. Earlier, the Russian-Chinese border was finally delineated in the Primorsky Region, where a number of territories were also transferred to China.

In 2010, Russia and Norway issued a “Joint Statement on Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean,”  ending almost 40 years of negotiations over 175,000 square kilometers of disputed territory of the Barents Sea. A new delimitation line divided this territory into two equal parts, which gave some experts a reason to say that Norway received almost 80,000 square kilometers of “Russian” territory (citing the fact that Josef Stalin once drew a demarcation line there).

These examples show that in rare cases Russia has agreed to redraw its borders as part of lengthy negotiations (sometimes running for decades),  based on existing contractual obligations and careful consideration of its national interests.

Who knows, maybe the same will happen to the peace treaty between Russia and Japan, finally closing the book on World War II in Asia and the Pacific?

From our partner International Affairs

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U.S. and China Gear Up for Ideological Warfare

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Within light of growing US-China competition and problems surrounding Anaklia, Georgia’s positioning as the US key strategic partner in the region might come under question. Any volatility on the future of Georgia’s Black Sea ports will hinder prospects of greater collaboration between Tbilisi and Washington. This would in the long run open the doors to Chinese investments, limiting America’s strength in the Black Sea.

Current developments in world politics have clearly shown that the 21st century will be more or less a geopolitical contest between the two giants, China and the US.

Many still compare China-US competition to the Cold War of the 20th century between Americans and the Soviets. The scale of the China-US contest is far larger than the 20th century example by involving technological, commercial and military competition. The Soviets could not compete in trade and technologies, while the Chinese nowadays are almost as strong as the Americans.

Thus, these confrontations are of quite different scales. But there was one interesting aspect in the Soviet-American cold war which is rarely mentioned by scholars, analysts and politicians – the ideological dimension.

The Americans, following the end of World War II, started increasingly looking at the Soviet challenge as an ideological battle. It was not merely about democracy being against communism, but more as a free world against oppression. Behind this thinking was a methodical strategic planning, military stratagems as well as effective alliance building abroad. But it was nevertheless important to cushion all of that into the concept of an ideological crusade. It helped the US master its allies across the world and explain that any meandering would lead to their destruction by the Soviet state’s non democratic institutions.

Ideology is important and it has always been so in history. Looking back at the post-WWII years, it is visible how gradually the American political leadership was moving from hopes of reaching possible understanding with Stalin to recognizing that a showdown was imminent. Once this realization happened, an ideological cushion was prepared and it became difficult to stop the US.

Back to the modern US-China competition, politicians and analysts in the West talk about possible consensuses between the two powers on trade and other issues. However, from time to time many even in the US itself fail to grasp how deep the differences between Washington and Beijing are, which limits exponentially the potential for a wide ranging agreement.

What is missed is the various hints coming from the US officials and the documents from American state agencies that Washington is starting to regard China’s rise and the challenge it poses the US-led world increasingly within the ideological boundaries.

There is a certain build-up in that sense, and it is likely that the competition with China will be framed as an ideological one in the coming years. As it was during the Cold War period, an ideological showdown will help the US better clarify its aims and ideas to its allies in the years that have seen a relative sluggishness in NATO and the west’s stance on global threats in general.

The ideological setup will also help framing the American public’s perception, master the country’s resources and perhaps reinvigorate the political class’ commitment to the transatlantic and Asia-Pacific allies.

At the same time, the ideological frame instituted by the US will likely be responded to by the Chinese side. As the Soviets did, Beijing will follow suit and frame its own worldview more openly and antagonistically (which it has so far explicitly avoided doing) towards the US.

The ideological framing of the competition will also be the last straw which would lead the two countries into the kind of war the Americans and Soviets had. However, while the US in the 20th century sat and waited till the Soviet Union collapsed, simply because the Soviet system was destined to fail economically from the very beginning, a similar expectation would not work for China.

Thus, it is important to watch closely the various statements and reports coming from both Americans and Chinese and how their respective official language evolves into religious, nearly canonical pronouncements of Good against Evil.

Author’s note: first published in Georgia Today

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President Xi Jinping’s diplomacy doctrine

Giancarlo Elia Valori

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After a long preparatory work and thanks to the strong mindedness that we already recognize to him, on March 10, 2018 Xi Jinping succeeded in imposing – with 99.86% of favourable votes – a constitutional reform enabling him to extend his stay in power without time limits.

It should be recalled that the maximum limit of the two consecutive terms of office was introduced by Deng Xiaoping in 1982 to avoid the danger of a “personalistic drift” (as Deng himself called it), which – according to that ruling class, just getting over the Red Guards’ harsh attacks -had characterized the last phase of Mao Zedong’s regime.

 After stabilizing his power within the Party and the State – with his loyal aides, such as Wang Qishan, who managed the world financial crisis of 2008-2010 and the relations with the United States, as well as Deputy-Prime Minister Liu He, supervising  economic and financial policy, and Yi Gang, the Governor of the Central Bank – President Xi Jinping established a large and cohesive negotiating group for international economic and financial affairs, above all with the United States. In 2017 the United States managed a trade surplus of 375 billion US dollars in favour of China, as well as a volume of Chinese investment in US Treasury bills equal to 1,200 billion US dollars and many other operations. At the core of them there is the New Silk Road, which will characterize the strategic-economic and geopolitical nature of China’s current foreign policy.

Power projection in the Heartland and US potential exclusion from it.

As Brzezinsky said, when the Heartland is united with the Eurasian peninsula, there will be the end of US hegemony. Both in Europe and in the rest of the world.

Furthermore,Liu He and Yi Gang spent long periods in the United States to study international finance and political science.

The powerful anti-corruption campaign also contributed to the quick and effective results of this great change in China’s leadership.  Besides the thoroughcontrol ofthe ways and procedures to select both the middle-low and upperranks of the Party and the State, carried out directly by President Xi Jinping’s “internal” group, said campaign was organized also by Wang Qishan, the powerful Head of the new Party’s “control commission” and very loyal to President Xi Jinping.

 An essential aspect of foreign policy, which for President Xi Jinping and his team is mainly economic and financial foreign policy, is the establishment of independent Chinese initiatives abroad, in addition to expanding China’s role in the WTO and in the other international organizations.

 It is by no mere coincidence that the Chinese intelligence services have a section dealing with the “use of international standards”.

 Initiatives such as the Investment Bank for Asian Infrastructure (in which also Italy participates) and the BRICS Investment Bank, which are essential for understanding the role of China as a country within the  world trade flows, but also its strong geopolitical autonomy.

 These phenomena will emerge above all in the 75 countries that have already joined the New Silk Road.

 Economic ties with China, but adhesion of the 75 countries to China’s unwritten project of hegemony in the new world order, which today, in particular, appears as a structural weakening of the United States.

With specific reference to diplomacy, the recently-drafted “Xi Jinping’s Thought on Diplomacy” envisages that – as  already done for seven decades -the Party develops a diplomacy thought “with Chinese characteristics” and that this Thought is defined directly by the CPC leaders.

While today’s world is infinitely complex, as Chinese leaders maintain, the Chinese diplomacy must also reach a new starting point.

A new starting point that simplifies the initial approach and leads to a New World Order, not focused on the United States, but linked – if anything – to a Chinese diplomacy operating bilaterally in all economic and political spheres and in all areas of the world.

Hence, following President Xi Jinping’s diplomatic policy line means – first and foremost -to remain loyal to the peaceful development pathway, with a view to furthering cooperation with all countries to achieve win-win results. It also means to support the formal architecture of the current international system, with a view to finally achieving a better external environment for all States and making definitive progress towards world peace and human progress.

Hence President Xi Jinping’s diplomacy means – first and foremost-support for the gradual and ongoing opening up of global markets, especially today when Western countries tend to protectionism, but is also designed to foster relations with the countries that the West is neglecting or still considers mere “deposits of raw materials”, such as Africa or Latin America.Said diplomacy, however, works above all to avoid the creation of hotbeds of crisis.

In a nutshell,albeit with some degree of legitimate simplification, President Xi Jinping is turning most of Mao Zedong’s “Three Worlds Theory” into diplomacy doctrine.

It should be recalled that it is a classification dividing the countries according to their hegemonic claims and designs, as well as to their power projection.

 The “imperialist” West and the “revisionist” USSR, or rather the First World, would wear themselves out, with their cold wars, on the ground of the “great European plain” they both want to conquer, while all the vast world that is not yet developed will be led by the People’s Republic of China.

 The Second World was made up of the developed countries, but the marginal ones compared to the nations of the First World.

Analyzing President Xi Jinping’s doctrine on Chinese diplomacy more in depth, we realize that these times have already come.

As to the First World, the USA is under crisis, while Russia is now part of the Chinese-led Heartland. The Second World’s countries can all now be part of a bilateral win-win project guaranteed by the new Chinese superpower.

 Firstly, China has experienced 40 years of continuous development, i.eafter the Four Modernisations and the subsequent economic and political reforms.

Currently China is the second largest economy in the world and, in 10 years’ time, Chinese analysts reasonably expect it will outperform the United States.

 On the other hand, as seen above, there is the progressive expansion of protectionist practices that lead to strong strategic and economic tension between States.

In this case, precisely with his diplomacy doctrine, President Xi Jinping maintains that the domestic choices must always be coordinated with those in the international sphere.

 There is no separation – which is eminently non-dialectic – between domestic and international policy in a country.

 Again according to President Xi Jinping’s doctrine, at world level the guidelines can only be those of mutual respect for global peace(hence never non-hegemonic) and of mutual development, not only at economic, but also at human level.

 It is a Western-rooted humanism, albeit “with Chinese characteristics”, as Chinese would say.

Hence President Xi Jinping’s Diplomacy Doctrine strongly supports multilateralism, both at political and economic and financial levels. It also promotes free trade and facilitatesinvestmentand finally tends to renew and “rejuvenate” the system of global relations as against the US “unilateralism”, which is closely related to protectionism.

Obviously an exporting economy such as China’s, which is however expanding also in the internal market, wants free trade. It is less obvious, however, that a country dominating the world financial system like the United States is linked to the protection of its industries, which are often mature or even decocted.

 The primary factor is that, in the idealistic diplomacy resulting from President Xi Jinping’s Thought, what is noted by many Chinese scholars and diplomats is the significant and specific contribution of the country to human civilization – a contribution that, in Chinese leaders’ minds, no other country can currently provide.

 It is not a secondary and rhetorical factor: humanism with Chinese characteristics shows that China holds universal values, while the West is ever less globalized in its values and lifestyle.

 The China that has expanded throughout the world, in the 40 years since the Four Modernizations, is a primary part of the international community. Its interests have spread across the world, which implies that China has a perspective and a way of assessing facts in a global and not strictly nationalistic way.

 Chinese humanism as hegemony of soft power.

Hence,  also the West – which is obviously not satisfied with China’s quick, stable and powerful growth – cannot even understand how, according to Chinese analysts, the country can have the perception of its universal commitments and interests.

A Chinese diplomat said that they have been accustomed to be modest, but they have begun to engage deeply in international and global issues, with a view to leading “the reform of globalization” – which is the key to President Xi Jinping’s geopolitics – particularly after the 18thCPC National Congress.

With specific reference to the relations between the USA and China, President Xi Jinping’s theory of Diplomacy maintains that cooperation always achieves win-win objectives, while confrontation always entails a loss for both actors.

According to President Xi Jinping, those who still have a cold war mentality isolate themselves from the world, and those who currently use zero-sum games will never be able to avoid confrontation without suffering great damage.

 If the United States creates the conditions for a hard confrontation with China – and powerful enemies emerge – it will reach a condition in which the contrast, even peaceful, will be so hard as to severely undermine the US world rank, as well as its status as first global economy.

 As to the relations between China and the Russian Federation, President Xi Jinping regards the two nations as global strategic partners in all areas.

Currently the relations between the two countries are “rock solid” – just to put it in President Xi Jinping’s Doctrine. Together they are becoming a strategically very important force for maintaining peace in the world.

 Common Russian-Chinese interests are always expanding, but they never negatively affect a third party and are never influenced by the decisions of a third party.

 It is the current Chinese definition of the classic term “independence”. Esoterically, the Void between two Full.

Hence, just to recap, President Xi Jinping’s diplomacy doctrine consists of ten simple points:

a) always supporting the CPC Central Committee’s policy as if it were the essential principle for action, underlining the function of the centralized and unified direction of the Party as far as all relations with foreign countries are concerned.

b) Supporting the development of diplomacy with Chinese characteristics, with a view to fulfilling the mission of national rejuvenation. The internal and external spheres are linked and must never be treated separately.

c) Preserving world peace and reaching a common level of development among peoples and nations, with a view to building a large community, with a shared future for all ankind. Chinese global humanism seen as a Vase of Kingdoms for every national and humanistic tradition.

d) Strengthening all countries’ strategic trust in Socialism with Chinese characteristics.

e) Continuing to work for the Belt and Road Initiative in view of all member countries’ common growth, through discussion and collaboration.

f) Following the path of peaceful development, based on mutual respect and win-win cooperation. Respect, not asymmetrical hegemony, but symmetrical hegemony – in the Chinese view – since it is the result of the political effects of a win-win relationship.

g) Developing global partnerships while proposing a diplomatic agenda.

h) Leading the reform of the global governance system, based on the concepts of justice and fairness – i.e. non-hegemonic concepts of a cultural and political nature.

i) Taking the Chinese national interests as the bottom line for safeguarding China’s sovereignty, security and development interests. It is once again the link between the outside and the inside of the same Vase, namely domestic policy and foreign policy.

j) Nurturing the growth of a specific style of Chinese diplomacy, combining the fine tradition of China’s “external work” with the current needs and characteristics of the international environment. This means to link the Confucian and elitist Chinese tradition with the daily practice of diplomacy.

 According to the Party’s current leadership, the study of President Xi Jinping’s diplomacy thought is an essential part of the thought on Socialism “with Chinese characteristics”, so as to achieve a New Era, which is designed to be the start of a global and peaceful diplomacy led by China.

 A diplomacy mainly supporting the reform of globalization, the deep core of President Xi Jinping’s diplomacy thought, as well as the global spreading of China’s win-win relations with all the countries of the world.

 From this viewpoint, and without ever losing sight of the goal of Chinese national rejuvenation and universal human development – another essential feature of President Xi Jinping’s diplomacy thought – new types of international relations will be established, based on mutual respect, fairness, justice and win-win cooperation. Global multilateralism.

In the future, the diplomacy with Chinese characteristics, introduced by President Xi Jinping, will promote a new international order, resulting from an inclusive world of stable peace, universal security and common prosperity.

This is not propaganda. It is a project that – in the specific terminology of the CPC Central Committee -is building China’s new foreign policy.

 Without this kind of political eschatology, we cannot fully understand President Xi Jinping’s thought on international relations.

 For a modern, but also for a traditional Chinese, the Confucian metaphysics of principles is what metaphysics was for Aristotle: “the science of ends” – ends which are as real as means.

 In fact, Father Matteo Ricci S.J. regardedConfucius as “the Aristotle of the East” and, in the “Rites controversy”, which involved the Jesuit and the Franciscan Fathers, the former supported the sinicizationof the Holy Mass because, despite everything, the Chinese tradition was comparable and consistent with Aristotle’s tradition that had refounded Catholic Metaphysics, through St. Thomas Aquinas.

Moreover, it is a moral and cultural standing proposing itself as a new leadership, in a world of political materialism – especially in the West – and of short-term operational and practical visions.

Hence, there is a successful merging of Marxist analysis and Chinese cultural tradition – a modern cultural and political tradition that is now also ancient.

Therefore, this is another essential point of President Xi Jinping’s Thought on foreign policy.

President Xi Jinping’s diplomacy is an important achievement of the now successful turning of Confucian thought into “Socialism with Chinese characteristics”.

In President Xi Jinping’s mind, arts and culture – which are also essential in the current Chinese power projection – are based on some points that can be taken from various speeches and documents and can be summarized as follows:

1) contemporary art must take patriotism as its primary theme (patriotism and not Marxism),thus leading the crowds  to have correct visions of history, nationality, the State and  culture. Confirming the integrity and self-confidence of the Chinese people – here lies mass pedagogy, which applies also to foreign policy.

2) Some artists ridicule the sublime (and much could be said in relation to the Western theory of the sublime) and even offend the classics, thus depriving the crowds of heroic figures. The world upside down, the good as the bad, the evil becoming good, the ugly becoming beautiful. Here President Xi Jinping, who knows the European culture well, will certainly remember a scene of the tragedy that built the Western culture: the ritual of the Three Witches around the cauldron in Shakespeare’s Macbeth.

3) The market value of arts is completely irrelevant, compared to their social value. Another problem of pedagogy in arts, while the West tends to exclude the public from the works of art and is scandalized – following Walter Benjamin -by their technical reproducibility. The economic benefits are always worth less than social ones – and this is another very important factor to understand President Xi Jinping’s thought. Nevertheless, the independence of arts and the autonomy of their aesthetic value is indisputable. Autonomy, not exclusion from the public.

4) Chinese art must never chase the foreigner. Provincialism is the absolute evil. We cannot say President Jinping is wrong.

5) Providing sound, healthy and progressive content to mass fashions coming from abroad.

In essence, it is a transposition – within the arts – of the same principles that President Xi Jinping has developed for the art of diplomacysince last June.

 In other words, the values of all behaviours;the universal effect of behaviours; the union between the private and the public sphere, i.e. between the external (foreign policy) and internal domains (national life).

The Chinese still view diplomacy as an art, unlike the West, which now regards its diplomats as sellers of goods and services, as financial promoters or advisors, and possibly as brokers of contracts.

 This will never be the diplomacy of a prestigious, influential and successful country.

The New Chinese Diplomacy, however, also concerns President Xi Jinping’s attempt to capitalize on Donald J. Trump’s isolation on the world scene.

 So far, however, only 19% of the citizens in 25 Western countries like China as world leader, while a US Rule is still acceptable to 25% of the world public.

 Not even the US results, however, are very brilliant.

 After all, President Jinping’s goal is to make China rapidly becoming a global superpower, thus creating a protective network of allied countries, with a view to counterbalancing the equivalent US structure of international relations. Once again the Void and the Full exchanging their roles.

In fact, one of the reasons underlying the Belt and Road Initiative is to create a network of long-term allies for China, capable of covering at least the whole Eurasian Heartland, thus blocking it in the face of the US power expansion.

Once again the Void and the Full, two terms of the Chinese esoteric tradition: the Full will be China’s and the Russian Federation’s undisputed power over the entire Eurasian Heartland, with ramifications towards an increasingly weaker Eurasian peninsula in geopolitical and military terms. 

The Void will be the US strategic autonomy around China – at least for the time being.

 There may also be a structural Chinese contrast with India, a future great power, also at economic level, but to the south, at the crossroads between the Heartland and the great line of communication between the Asian Seas and the Persian Gulf, and finally the Mediterranean.

For the time being, the EU irrelevance will suffice. An unbeatable guarantee for both the USA and the other major global players.

The void, more important than the full, is currently the still decisive US presence in the primary and secondary seas, with little penetration into Africa, very strong US presence in Europe and the North American management of the break between Eastern Europe and Russia, which is capable of making the Heartland open and “viable” and depriving it of strategic value. 

 This is the great picture in which President Jinping’s Diplomacy Doctrine shall be seen.

Hence, we are still in the phase of the speech delivered by President Jinping to the CPC Central Committee in 2017, when he said that “China would stand tall and strong in the East”.

In a phase of globalization crisis, we are still reinterpreting the theme of China’s  “central interests” – an issue that had been discussed by the Chinese leaders, especially in the early 2000s.

 On the basis, however, of the “great rejuvenation of the Chinese nation” and of the “Chinese dream”, two essential themes of the 18th CPC Congress that crowned Xi Jinping as leader.

  The President has quickly become China’s “central leader”, especially through the great campaign against corruption.

 At international level, Jinping’s Presidency differs greatly from an essential strategic theme of contemporary China: the low profile imposed, at the beginning, by Deng Xiaoping.

Deng seemed to think that China should be allowed to build a modern economy, which was its first and fundamental objective, but should not be bothered with the major geopolitical and military issues, which were still out of reach and diverting the country from its primary objective.

President Jinping has instead overturned this principle: China certainly has world ambitions, which are also its primary interests.

Hence China’s core interests are well known: the establishment of the Asian Infrastructure Investment Bank;the One Belt, One RoadInitiative; the construction of artificial islands in the Sea of Japan; the building of the Djibouti base and the silent participation in many world conflicts and tensions. These are all ways to further China’s global power and protect its primary interests.

We should also recall “China 2025” and “Amazing China”, two projects that are far from negligible in this new Chinese plan that consists in regulating, reforming and even regaining globalization, while other countries, such as the USA, temporarily recreate their economy and their labor force returning to protectionism. Inevitably, this will always recoil on them.

 Protectionism is a drug with short-term effects.

 The alternative option is twofold: to continue the game of globalization – which has now almost completely deindustrialized the nations that began the Industrial Revolution of the 19th century – or to temporarily strengthen the country with protectionism.

On the one hand, however, China can afford globalization because it has a different productive formula but, on the other, it could play even the game of protectionism, using the belt of the Silk Road countries, which can easily maintain and absorb an acceptable level of Chinese exports, even under the terms and conditions set by China.

Hence, are we now faced with a new cold war, the one between China and the West?

 Probably, but only a Third Type one, with an economic war characterized by Second Type skirmishes, halfway between the symbolic and the strictly military domains.

 China has already tried to close operations with an alliance between it and the EU, Russia and Japan.

Nevertheless, considering the current configuration of world trade, the attitude has been lukewarm.

 The USA has instead reactivated part of its trade with the EU, by greatly strengthening its historic relationship with Japan.

Hence, there is once again the spectre of China’s closure within its traditional borders – a danger that President Xi Jinping wants to avert ab ovo.

 As early as 2009, China’s “central interests” were theorized in the Central Committee as: 1) China’s fundamental system and State security; 2) the State sovereignty and territorial integrity; 3) the stable development of the economy and society.

 The 2011 White Paper added “peaceful development” and “national reunification” to these fundamental policy lines.

 That is the one with Taiwan.

 Currently China makes it increasingly clear that respect for its core interests is essential to create the win-win relations that characterize its bilateral economic relations.

 This is one of the primary aims of President Xi Jinping’s Diplomacy Doctrine.

Moreover, China, is no longer encouraging Chinese companies’ investment abroad, thus reuniting all what was previously scattered everywhere in the sole Belt and RoadInitiative, which is currently part of the Constitution and the Party’s Basic Policy Line.

The Belt and Road Line was born from that of the “March to the West”, a strategy initially developed by the international policy expert Wang Jisi, who believed China had to go towards Central Asia and the Middle East, with a view to minimizing the tensions with the United States in East Asia.

An essential area for the United States.

Currently, however, the “Belt and Road” initiative is a global and not a regional initiative – as Wang Jisiinitially thought – a project that will lead to geopolitical upheavals not yet predictable.

 The project stems from two essential needs: China’s exit from its unsafe traditional borders and the continuous, stable internal economic development that, where lacking, would put the power of the Party and the State to a hard test.

These are the economic and political mechanisms that President Xi Jinping’s Diplomacy Theory wants to expand and protect.

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