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Friendship in a “new situation”

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The close friendship between China and North Korea is back in the news as Chinese President Xi Jinping called for greater cooperation with Pyongyang in an unspecified “new situation”. Interestingly, the message comes amidst the Russian invasion of Ukraine and closely follows North Korea’s series of missile tests, conducted last month. It is important to reflect on the friendship between Beijing and Pyongyang and what such a “new situation” might entail.

Strengthening Friendship

Xi Jinping, in a message to North Korean Supreme Leader Kim Jong-un, called for enhancing “cooperation and friendship” between the two states in a “new situation”, reported North Korea’s state media, Korean Central News Agency (KCNA). Xi’s message follows Kim’s congratulatory message to China on the  conclusion of the recently held Winter Olympics in Beijing, which he claimed was successfully held against “unprecedentedly severe health crisis and the hostile forces’ manoeuvres” , pointing to the challenges presented by the Coronavirus Pandemic as well as the United States led diplomatic  boycott of the Olympics against China’s poor human rights record. Kim also called for cooperation between China and North Korea in “frustrating the undisguised hostile policy and military threat of the U.S. and its satellite forces”.

Beijing and Pyongyang on Ukraine

The renewed bonhomie comes amidst Russia’s invasion of  Ukraine. China has abstained from voting against Moscow in the United Nations Security Council (UNSC) and mooted the discussion over clearly choosing Putin’s side by diverging from its rhetoric of safeguarding sovereignty and territorial rights of nations. It had blamed the United States and its allies  for creating a conducive situation for the Russian act which the Chinese diplomat at the UNSC referred to as an “invasion” rather than Russia’s official claim of it being a “special military operation” and hence, indicating it to be against the United Nations Charter which China claims to faithfully uphold.

Beijing however, seems to have changed its stance on the issue as the war continues to escalate. In his recent telephonic conversation with Ukrainian Foreign Minister Dmytro Kuleba, Chinese Foreign Minister and State Councillor Wang Yi referred to the situation as “war” and expressed his concern regarding the safety of Ukrainian civilians and Chinese residents of Ukraine who are said to number 6000 on the eve of the invasion. Wang stated that China does not recognise the expansion of military blocs and ensuring security of one state at the cost of another’s sovereignty and territorial integrity.

North Korea, on the other hand, has been more vocal. Blaming the United States for “ignoring Russia’s reasonable and legitimate demands” for guaranteeing legally backed security assurances, Pyongyang has thrown the complete onus of the invasion on Washington’s and its allies’ “hegemonic policy”, “high-handedness” and “abuse of power” which it claims includes the North Atlantic Treaty Organisation’s (NATO) eastward expansion and deployment of attack weapons systems in Eastern Europe.

Nuclear Dreams

North Korea’s statement comes a day after it fired a missile which follows a record number of launches in January this year.

These developments mark North Korea’s biggest launch since the launch of Hwasong-15 in  2017. The missiles are both highly precise and highly lethal, with the ability to hit low altitude targets at a speed five times that of sound.

Apart from threatening the Northeast Asian region and global security at large, it also poses a direct territorial threat to South Korea and Japan, whom Kim considers Washington’s vassals.

Though Kim Jong-un has not personally attended any of the tests, he visited an unspecified munitions factory earlier last month, which is said to be producing a “major weapon system”.  The KCNA reported that North Korea would restart all of its “temporarily abandoned activities”, indicating nuclear tests which have been under a self-imposed embargo since 2017. Moreover, in a Politburo meeting of the Workers’ Party of Korea, Kim called for “immediate bolstering” of North Korea’s military capabilities.

With its economy, which was already crumbling under the weight of sanctions, being on the verge of collapse due to a strict state imposed lockdown to curb the Coronavirus pandemic, North Korea has found weapons proliferation as a way of provoking the United States and its allies to negotiate with it on Pyongyang’s terms in order to lift the sanctions while maintaining regime legitimacy at home.

Abandoning Ukraine

If there is anything that the Ukraine crisis has brought to the fore, it is the apathy of the United States and its Western allies. Neither the United States, the European countries nor the North Atlantic Treaty Organisation has expressed any intention to send forces to Ukraine.

Though Ukraine is neither a member of NATO nor the European Union, it has a close relationship with both the organisations. While a military response is not desirable, they have also failed to avert the crisis diplomatically.

NATO has done little beyond verbally criticising Russia. The European Union too has extended only “humanitarian, political and financial support” to Ukraine. The European Community apart from other US allies such as Japan, New Zealand, Australia, the United Kingdom among others have decided to oust Russia from SWIFT, a high security network that connects thousands of international financial institutions. They have also decided to freeze Russia’s foreign assets.

The biggest shock however came from the United States, considering the close relationship that the two have shared since 1991 when Ukraine became an independent nation after the disintegration of the USSR.

In his State of the Union address delivered on March 2,2022, US President Joe Biden applauded the undaunting spirit of the Ukrainian people to fight for their country but stated that he did not intend to send his forces to fight the Russians for Ukraine. He would however, do so if “any inch of NATO territory” comes under threat, shattering all hopes of the Ukrainian people and President Volodymyr Zelenskyy who find themselves standing alone.

Biden did enlist all measures taken by the United States in countering Russia. Apart from launching a widespread diplomatic protest, creating a US Department of Justice task force to “go after the crimes of the Russian oligarchs” and closing off American airspace to all Russian flights, Washington aims to hurt Russia economically by enforcing sanctions, cutting off Russia’s largest banks from the international financial system, attacking and seizing private property of Russian oligarchs as well as by preventing Russia’s Central Bank from “defending the ruble”. Biden also promised military  (other than sending  forces) and financial assistance to Ukraine.

The Sports community has also strongly reacted to the Russian invasion of Ukraine. FIFA, in a joint statement with UEFA has announced its decision to expel the Russian team from the 2022 World Cup and all international competitions.  The World Taekwondo Federation has stripped Putin of his honorary black belt which was awarded in November 2013.

Though these sanctions are much harsher than those Russia has been familiar with, they are unlikely to topple Putin’s regime. Experts believe that the economy was already destabilised the day the “military expedition” was launched and the banks have already devised a system of working independently of the SWIFT. While the oligarchs would still remain very rich, the common people would be badly hit. Moreover, Russia might still find a market for its energy resources and defense exports.

The “new situation” thus points to a world order where the United States and its allies would restrict their role in international events and would not act as assertively as they once did.

An Invincible Friendship?

While China and North Korea have claimed their relationship to be “invincible and immortal“, bilateral relations have not always been a smooth sail.

During his struggle against the Japanese colonial regime, Kim Jong-un’s grandfather, Kim il-Sung had served with the Chinese Communist guerrillas. The two nations came together for the first time during the Korean War (1950-1953) when Chinese leader Mao Zedong sent his forces to support Pyongyang. However, the relationship soon turned sour in what came to be known as the August Faction Incident.

In August of 1956, pro-Soviet and China affiliated Yanan factions of the  Workers’ Party of Korea criticised Kim il-Sung for betraying the Leninist idea of collective leadership by building his personality cult and called for his removal from the leadership position. Kim responded by strengthening his own Kapsan faction and purging all dissenting voices. The August Incident made it clear that China did not approve of the coveted position enjoyed by the ‘Great Leader’ and hence, could not be trusted. Later, Pyongyang criticised Mao’s Cultural Revolution (1966-1976) and Beijing responded by dubbing North Korea as “revisionist” and hence, against the true spirit of Marxism-Leninism.

However, the two came back together in 1961 when the May 16 coup d’état of 1961 led by General Park Chung Hee in South Korea, which soon followed a rise in military expenditure, threatened North Korea with the possibility of a Seoul led invasion. Pyongyang went knocking on Beijing’s doors for help and what resulted was the Treaty of Friendship, Cooperation and Mutual Assistance between the People’s Republic of China and the Democratic People’s Republic of Korea,1961 which stands as the only defense treaty either of the states have with any nation.

Article II of the treaty reads:

“The Contracting Parties undertake jointly to adopt all measures to prevent aggression against either of the Contracting Parties by any state. In the event of one of the Contracting Parties being subjected to the armed attack by any state or several states jointly and thus being involved in a state of war, the other Contracting Party shall immediately render military and other assistance by all means at its disposal.”

Both Parties continue to abide by the treaty.

Relations soured again during the late 1980s and early 1990s when North Korea’s nuclear proliferation programme was revealed. The 1990s was a difficult period for Pyongyang as the disintegration of the Soviet Union had not only robbed it of a major developmental trade and aid partner but by then cracks had also begun to appear in its Stalinist economic structure which was badly hit by international sanctions and natural calamities. Moreover, North Korea had learnt the power of possessing nuclear weapons to sustain its regime during the Korean War itself. It realised that the time was ripe to make its own nuclear weapons to secure the survival of the Communist Party regime amidst growing animosity with the West.

Though China has opposed Pyongyang’s nuclear proliferation programme and has recurrently called for denuclearisation of the Korean Peninsula, it continues to support Pyongyang diplomatically at international forums and stabilise its economy as North Korea’s largest trade and aid partner. North Korea represents China’s core interests in Northeast Asia. Pyongyang is not only one of the few surviving anti-America bastions on the face of the earth but a collapse of the Kim regime might entail a refugee crisis on China’s border and threatens to derail Beijing from the path of  economic development. Moreover, China has refused to support Washington’s demand that Pyongyang denuclearises unconditionally before any talks on lifting the sanctions can be initiated. It calls for lifting of sanctions in a phased manner while a commitment of denuclearisation is made by all sides including the United States.

In 2002, US President George Bush dubbed North Korea among the “Axis of Evil” alongside Iran and Iraq. The subsequent US invasion of Iraq threatened a possible attack on Pyongyang. China came to North Korea’s rescue and called for Washington to abandon its hostile attitude.

Sino-North Korean relations received another blow in 2013 when Kim Jong un discovered a plot, hatched by his uncle and a close ally of China, to replace him with his brother. Relations were restored when Kim visited Beijing in 2018 followed by an official visit by Xi to Pyongyang. Kim has continued to support Beijing on allegations of human rights violations in Xinjiang, Tibet and Hong Kong as well as its official stance on Taiwan and the origins of the Coronavirus.

Whither China-North Korea?

While Pyongyang might utilise Beijing’s shadow to continue its missile launches and nuclear proliferation programme to test the bounds of Washington’s and its allies’ patience in the “new situation”, China’s changing stance on Russia wraps its active support for North Korea’s actions with doubt. Though a weakened Russian economy and military would strengthen China and bring it closer to a great power status,  instability involving highly lethal weapons, let alone nuclear weapons, on its borders is the last thing that Beijing would desire. At best, China would let North Korea frustrate Washington and challenge its waning authority as a superpower only to the extent that it does not create any major instability in the region.

It must also be realised that there isn’t anything ‘invincible’ about Sino-North Korean friendship if it wasn’t for the United States. 72 years back, it was the United States which brought the two together and presently, it is Washington’s refusal to negotiate with North Korea in a nuanced manner which continues to embolden the two. The idea is not to show any clemency towards North Korea but to address its concerns without which no agreement on denuclearisation could ever be reached. Only peaceful dialogue, which addresses the realities of international power dynamics, can build a path to a peaceful world.

Non-resident Vasey Fellow at Pacific Forum, Hawaii. Cherry Hitkari is an Advisory Board member of 'Tomorrow's People' at Modern Diplomacy. She holds a Masters in East Asian Studies specialising in Chinese Studies and is currently pursuing an advanced diploma in Chinese language at the Department of East Asian Studies, University of Delhi, India.

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East Asia

Japan-Indian Equalizer of China Grow

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Image source: twitter @kishida230

The two-day visit of Japanese Minister Fumio Kishida to New Delhi on March 2023 suggests that political and geopolitical events are actively performed in the Indo-Pacific region. A military-political alliance or at least close, deep cooperation in the political, economic and military-technical areas is gradually and very systematically developing between Japan and India. The parties have a long history of connections, and we witness an incremental systematic deepening of these contacts. Now we are talking about interesting agreements in the infrastructure of the economy, trade and military-technical cooperation. It is especially worth mentioning the general military training, which is still in an air format. Still, I think it will soon be in other military cooperation areas. It has been said in commentary by Georgi Asatryan, Ph.D., political scientist, expert for ASOF (California), former associated professor for the Moscow State University, and senior lecturer for Plekhanov Russian University of Economics, political scientist Georgi Asatryan.

Of course, we need to say that India and Japan have certain competitive relations with the Asian superpower China. And in this regard, they are deepening cooperation to restrain the ambitions of a growing China. Here again, it is worth mentioning Japan’s security strategy, which was adopted in December, and as many as three key instruments were revised. This is the national security and defence strategy and the Japanese military construction program. A big part is given to cyber security, economic security, diversification of economic relations, and infrastructure relations.

And, of course, neither India nor Japan calls China an enemy or a threat. But there is an understanding that we are talking about a strategic challenge, and all this is aimed at preventing China. It is also worth noting that the USA is invisibly present in this group, and Japan has a significant agreement with the USA. In fact, it is a military alliance outside of NATO.  In January 2023, Biden and the Japanese minister met. A complete joint statement was published where it was noted that this union does not have certain borders and that the union of the USA and Japan is ready to resist any threats these countries face. And, of course, Taiwan’s sovereignty is important for Japan.

For India, this is less essential. But in any case, the parties are actively building advanced relations within international organisations such as QUAD, which includes Japan, India, Australia, and the United States. Within this framework, a particular security structure is being created in the Indo-Pacific and the Asian region, which should restrain the excessive ambitions of a growing authoritarian China. It should be noted that the Indian and Japanese leadership are achieving some success in this matter. There is quite serious progress, which is permanent and visible in all areas of relations between these countries.

The goal of India-Japan cooperation is to stabilise the Indo-Pacific region by restraining Chinese behaviour. Geography shapes their responses differently, with Japan focusing on maritime capabilities, and India on the land. There are differences, too, in the fact that fellow Quad members Japan and Australia are formal military allies of the US, while India is not. But what is shaping the new initiatives and orientations are fears of China and in this, Japan and India provide the two key lynchpins of the free and open Indo-Pacific.

In December, the Kishida government revised three key documents relating to its security perspective in the region. These were the new National Security Strategy, the National Defense Strategy and the Defense Buildup Program. Taken together, these are addressing new domains and challenges, including space, cybersecurity and economic security. The new documents said that Japan was “facing the most severe and complex security environment since the end of World War II.” A major concern was that China could attempt to reunify Taiwan by force in the coming decade. Tokyo does not quite yet designate China as a “threat”, its chosen designation is “the greatest strategic challenge that Japan has ever faced.”

But perhaps the most significant development was the sentence in the Biden-Kishida joint statement January 2023 which said that not only had the alliance never been stronger but that the allies “strongly oppose any unilateral attempts to change the status quo by force or coercion, anywhere in the world.” More than anything else, this statement marks the change in Japan’s global posture. But ties between the two on the economic front are way below their potential and India has a lot of catching up to do with China. As The Economist has pointed out, China accounted for 24 percent of Japan’s imports and 22 percent of its exports, while India accounted for 0.8 percent of Japan’s imports and 1.7 of its exports.

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East Asia

Will Xi Jinping Continue the Wealth Crackdown in his Third Term?

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Of the  445 people who lost their billionaire status last year, the majority, almost 230 were from China, According to the recently released Hurun Global Rich List for 2023. Beijing’s crackdown on major tech companies which began in 2021, continues to hurt the country’s super rich. Tencent owner Ma Huateng lost three points and was placed at 31 on the list. Jack Ma Yun, founder of China’s e-commerce giant Alibaba Group Holding, dropped 18 points to 52nd place from 34th a year earlier. ByteDance owner Zhang Yiming is down by 11 points alongwith CATL chairman Robin Zeng Yuqun whose worth dropped by 13 points.  Others leading Chinese entrepreneurs to drop on the superrich list included Netease CEO Ding Lei who was down 9 points and placed at 46th place tying with He Xiangjian co-founder of Midea, one of China’s largest appliance makers who fell 11 points.

Earlier this month Xi Jinping formally began his term as President for an unprecedented third time. Frustrations over lingering COVID-Zero policies, censorship, economic stagnation and hardships, led to rare yet legitimate protests in China which ultimately only led to a deepening crackdown on dissenters. Amidst increasingly antagonistic international relations, wherein Chinese companies are facing harsh scrutiny both domestically and by the US had curbed corporate enthusiasm .

Pursuit of Common Prosperity:

A central pillar of the economic miracle that took place in China in the past decade was the conscious decision to unleash the entrepreneurial energies of its business class by destigmatizing the accumulation of wealth. During the years of China’s market reforms (1978-2005) GDP rose by ten times, average wages grew six fold. By 2020 GDP per capita was averaging about $10,000 and China entered an era of wealth and prosperity. This led to a concentration of massive personal wealth. In 2020, mainland China had 626 billionaires, and the total wealth of China’s 400 richest soared to $2.11 trillion, from $1.29 trillion a year earlier. Advancements by technology brands like Alibaba, Huawei, Tencent were driving the global economy.  But the Chinese government’s business-friendly record has wavered under leader Xi Jinping and his regulatory crackdowns on private enterprise, as he pursued a campaign of ‘Common Prosperity,’  aimed at driving down inequality by spreading wealth.

The tech sector’s breakneck growth worth some $4.5 trillion exposed market behaviours that raised the eyebrows of the Chinese leadership. Xi Jingping trained his eye on China’s class of billionaire CEOs. China’s cyberspace regulator fined ride sharing app Didi Global just over $1.2 billion for violating cybersecurity and data laws. Aside from this, a personal fine of $147,000 was imposed on Didi’s chairman and CEO Cheng Wei and president Liu Qing, respectively. Didi also saw its plans to list on the New York stock exchange go up in smoke. Regulations imposed on food delivery app Meituan, eroded over $25 billion its stock value. In the financial sector China has resorted to sporadic crackdowns, on cryptocurrency, on peer to peer lending and on fintech giants. Jack Ma, once the poster boy for the rapid rise of China’s technology industry delivered a now infamous speech on October 24, 2020 criticising the government’s financial regulation, claiming that these would stifle innovation. The government responded by suspending the Ant Group’s US$37 billion IPO in Hong Kong and Shanghai. Through 2022 Tencent, which owns 17% of Meituan, was engaging with financial advisers to execute a potentially large sale of its Meituan stake. Recently the Chinese government acquired the “golden share” in units of Alibaba and Tencent Holdings, to gain decision making control.

China also used the now scrapped zero-Covid policy to invade the private spaces of the elite class. Added to the tech crackdown are global monetary tightening, COVID-19 disruptions, a complex political climate resulting in many wealthy Chinese physically relocating to other countries. Platforms such as GitHub are swarming with chat groups discussing exit from China. Singapore,  known for its tax-friendly regime, political stability, and widespread use of Mandarin has become a preferred destination. And although Japan doesn’t have the best of relations with the PRC it has welcomed wealthy Chinese with its attractive business investment visas. After his fallout with Chinese authorities Jack Ma moved to Tokyo and was only recently seen in Bangkok. Since the Jack Ma incident several CEOs like TicTok and ByteDance founder Zhang Yiming, online retailer billionaire founder Richard Liu, founder of e-commerce giant Pinduoduo Colin Huang.

Last year’s rare protests against Chinese leadership in the wake of  Xi Jinping’s imposition of a zero-Covid policy that kept many urban residents under strict lockdown were an indication of how difficult life was becoming for ordinary Chinese, to say nothing of businesses operating there. 

Growth Target set at 5%:

In 2022, the Chinese economy grew just 3%, missing its expansion goal of around 5.5% by a wide margin. Covid control policies took a heavy toll on a wide range of businesses and activities. At the National People’s Congress, the country’s annual parliamentary gathering, earlier this month a modest GDP target of 5% was announced. In his first press briefing, Chinese Premier Li Qiang,  acknowledged China won’t find it easy to meet the goal of expanding GDP by about 5% this year, as the government focuses on delivering stable prices, creating jobs and supplying ample housing. Managing director of Beijing-based boutique investment bank Chanson & Co, Shen Meng feels that the 5% goal is more reasonable as it is “more in line with downward pressures including a weakening in exports and consumption.”

But with economic indicators not looking up, the possibility of achieving the relatively conservative target of 5% growth in 2023 looks difficult. Chinese exports slid by 6.8% by January and February, and imports were down by 10.2% during the same period. Meanwhile, the yuan lost about 8% of its value against a surging dollar in 2022, the biggest annual drop since 1994. In addition to the slowing economy this is also largely due to the Federal Reserve’s aggressive rate hikes. In the past year to end-January, in China, the benchmark Shanghai Composite index lost nearly 11%. The pace of the recovery in Chinese consumer demand has not been as strong as expected.

Declining Revenues In Property Sector:

The finances of local entities are already stressed from the burdens of financing years of COVID containment. Although the Chinese government has doled out generous fiscal stimulus, property investment has dropped by 5.7%. China’s crackdown on the property market, meant that the industry shrank 5.1% in 2022. The government sensed that the property sector had become one of the biggest drags on the wider economy. Although it has recently eased funding access for many real estate companies, Moody’s Investors Service forcesats that nationwide sales are likely to decline again in 2023 due to continued sluggish demand.  Chinese conglomerate Fosun International, has total liabilities worth $90 billion, an increase of 8% from last year. Amid declining revenues from property sales, it remains to be seen how long the government coffers can float the economy.

Celebrities Under the Scanner:

Even some of China’s most popular media stars find themselves under the scanner of the  “common prosperity” campaign to correct wealth inequality. In an effort to rein in the prevailing consumption culture in China, stars like Zheng Shuang, Zhao Wei, internet celebrity Viya, find themselves facing financial penalties and even arrest as in the case of Liu Xiaoqing, one of the most famous actresses in China. Such relentless targeting of media stars who draw traffic and drive up consumption, is making merchants and brands at Alibaba and across a number of its rivals’ platforms nervous.

Tencent Holdings which has spent most of 2022 reeling from the crackdown on the technology sector has seen two quarters of falling revenues.  As authorities were focused on solving social problems like gaming addiction among the country’s youth, Tencent suffered from the lack of approval to gaming licences. Although the withholding of licences is now withdrawn, Tencent remains cautious about its posture. As if mindful of the President Xi Jingping’s posture towards technology billionaires, Tencent co-founder President Martin Lau said “We will definitely not reverse back to the relatively unrestrained development path prior to the pandemic,..We will improve efficiency in a discipline-oriented way,” at a recent media event. 

Antagonistic International Relations:

The China-U.S. has intensified, with President Joe Biden administration seeking to curb tech exports to undercut the progress of Beijing’s technological and military advances. With several Chinese companies and other organisations on the US Entity List, prohibiting them from using strategic American technologies, the crackdown on China’s chip industry is beginning to bite. A subsidiary of ByteDance TikTok which has over 150 million American users, is under greater scrutiny accentuated by the dramatic congressional hearing of its  CEO Shou Zi Chew last week.

Chinese companies are facing equally harsh scrutiny and consequences in other destinations. Amid concerns over China’s involvement in critical UK infrastructure, the UK government has removed China’s state nuclear company out of the nuclear power plant project on the Suffolk coast.  In his speech to the Lord Mayor’s Banquet, Prime Minister Rishi Sunak announced that the UK needs to evolve its approach to China and that the “golden era” of relations with China had to end as close economic ties had proved to be naive.

Xi Begins his Third Term:

After receiving a unanimous endorsement from the National People’s Congress, President Xi Jinping was re-elected as president for a third term on March 10, effectively cementing his status as the country’s most powerful leader since Mao Zedong. This was a certainty after the 20th National Congress of the Communist Party of China elected Xi Jinping as party leader for a third term last October. But even as Xi Jinping began his unprecedented third term, the political climate in China remains uncertain. A mix of economic slump and complex policies is making the wealthy rethink their stay in the country. The drive to reign in the economic influence of China’s private sector has diminished private sector expansion and business confidence. The regulatory policies unleashed in the past two years are unlikely to be relaxed anytime soon. Speaking to delegates on March 6, he reminded business leaders of their responsibilities to adhere to the law and support “common prosperity,” clearly indicating that in the campaign to makeover the economy the wealthy might yet be unsparingly targeted. Under President Xi Jinping’s stringent wealth crackdown, there are fears of arbitrary detention, expropriation, or at the least trumped up charges. These anxieties are fueling an emigration trend among the Chinese ultrarich. It is unlikely that with the current economic slowdown the common prosperity campaign will help bridge the gap between the rich and the poor. But  meanwhile the brutal crackdown by Xi Jinping will have lasting effects and cause further damage to its economy.

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East Asia

Saudi-Iran Truce: China’s Highway to Diplomatic Exploitation



Musaad al-Aiban, a Saudi minister of state (left), and Ali Shamkhani, Iran’s secretary of the National Security Council, in Beijing. Photo: Saudi Press Agency

The time-ravaging rivalry between Iran and Saudi Arabia ranks below few in the assemblage of unresolvable, primeval conflicts since it is based on dogma, entwined in history, and fought through proxies throughout the Middle East. Therefore, being able to get these two arch-nemeses to sign March 10 historic agreement of truce, could potentially have colossal impacts on the world, particularly in terms of mutating China’s global image. At first, as the fog lifts, it could appear as though this development could contribute to greater stability in the region, which has been plagued by political and sectarian tensions, proxy wars, and terrorist activities in recent years. A rapprochement between both the regional major powers could most definitely lead to a reduction in hostilities and an increased focus on addressing common challenges. At the very least, a stable Middle East would be beneficial for the majority of the world especially in terms of global energy security as the region is a major oil and gas producer and exporter. Any disruptions in the production or transportation of oil and gas from the region usually has cataclysmic impacts on the global economy, particularly in energy-importing countries. As two of these are the most powerful countries in the Middle East, their toil for dominance has been felt throughout the region and beyond. However, many connoisseurs of international politics are increasingly starting to believe that China as a third-party player in this game, is set to benefit, immensely and cleverly.

China’s role in repairing the Saudi Arabia-Iran relationship could significantly enhance its own diplomatic and economic influence in the Middle Eastern region. As Beijing continues to expand its economic and political ties with countries in the region, its ability to play a constructive role in regional affairs could be further bolstered. The Chinese leadership has been quietly increasing its presence and influence in the Middle East for years, but the Saudi-Iran rivalry seems to have served the perfect opportunity for Beijing to promote its national objectives, on a silver platter. As the greatest oil consumer in the world, Beijing mainly depends on imports to meet its energy needs and with Saudi Arabia being one of its main oil suppliers, it cannot afford to ignore Iran which also boasts large oil reserves, serving as a highly crucial alternative source for energy supplies. By brokering a hostility-reduction agreement between the two countries, the Xi administration is able to influence the region’s energy environment by preserving close commercial connections with both nations. China is making significant investments in Saudi Arabian and Iranian infrastructure projects in addition to the energy sector. Saudi Arabia’s Vision 2030 plan, which aims to diversify the country’s economy away from oil and establish a more modern and diversified economy, has seen significant Chinese participation. China has also contributed to the development of a high-speed rail link connecting Tehran and Mashhad as well as Iran’s energy, transportation, and telecommunications industries.

Global implications of this Chinese diplomatic triumph

These investments have expanded China’s political influence as well as its economic relations with both the nations. It has been able to sway Saudi Arabian and Iranian goals and policies through economic pressure, allowing it to participate in regional politics without getting involved in their skirmishes. Nevertheless, the growing influence and presence of the dragon in the Middle Eastern region has not gone unnoticed by other world powers. Beijing’s expanding influence in the region and its potential to harm its interests have raised concerns, particularly in the United States and also in Israel. The Israeli administration has been engaged in a long-standing battle with Iran and has decided to thaw the ice with Saudi Arabia; any initiatives to ease hostilities between these two nations might be viewed as a danger to Israel’s interests. Reduction in Saudi-Iranian hostilities also serves Russia and Turkey’s purposes of gearing towards a more multipolar order in the region, a goal they desire due to their perception of the US as a geopolitical rival. In the case of India, any Chinese role in tension-reducing efforts between Saudi Arabia and Iran poses a complex and multifaceted dilemma for its interests. India’s historically violent territorial disputes with China, along with its concern about the latter’s increasingly assertive presence in South Asia, particularly its investments in countries like Pakistan, Sri Lanka, Nepal and Bangladesh, are some of the main factors behind New Delhi’s apprehensions towards this Middle Eastern conundrum. Additionally, India’s close ties with the US, which has traditionally been a significant ally of Saudi Arabia and has been involved in attempts to contain disruptions in the area, make it unfavourable for the country. Any decline in US influence in the region will be perceived as a negative development for the Indian side.

Chinese mediation efforts: trust or scepticism?

Despite these concerns displayed by major powers all over the world, Beijing has continued to openly welcome the opportunity to play a role in reducing tensions between Saudi Arabia and Iran. Beijing’s professed policy of non-interference in the domestic affairs of other countries, has made it an attractive partner for other countries in the Middle Eastern region looking to reduce tensions and find peaceful solutions to various regional conflicts that persist there. From China’s perspective, its involvement in the region is driven by two main factors. First is to secure its energy needs until it finds an alternative source that makes it less dependent on the Middle East; until then at least in the short-term, its reliance on the region for energy is set to increase. Beijing’s decision to ramp up purchases of heavily discounted Russian oil, diminishing procurement of cheap Iranian oil, was met with uneasiness in the Middle Eastern oil community. This might have further influenced their decision to allow China to play the role of a broker in the Saudi-Iran dispute to regain the dragon’s trust. Second is to further promote its Belt and Road Initiative (BRI), the expansion of which may provide Beijing a backdoor entry into various partner countries’ political and security affairs, boosting its cover of non-interference even further. With the signing of this truce agreement, China has officially attained the peculiar role of a global peace-negotiator. It shows that Beijing is now ready to flex its economic muscle in the face of its observers as a third-party broker; its goal to reinvent the country as a world leader at the expense of the United States may be a deciding factor in the current global transition of power poles. China has used its position as both the largest consumer of Middle Eastern oil exports and the top economic partner for both nations to its advantage in mediating this dispute. What is quite straightforwardly obvious is that the Chinese government is more than willing to play the role of a mediator in situations where diffusing it serves in extending its own national objectives. Whether or not it applies to situations where its objectives stay completely unaffected, for instance, the India-Pakistan and Russia-Ukraine issues, remains to be seen. How it plays out for its own image as a regional aggressor or backyard bully, is also another matter to observe.

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