In March this year, China hosted third summit of Afghanistan’s neighbours’ foreign ministers. Ministers or senior representatives of seven countries Iran, Pakistan, Russia, Tajikistan, Turkmenistan and Uzbekistan attended the meeting. Alongside of the summit, China also initiated a new dialogue called “Neighboring Countries of Afghanistan Plus Afghanistan” Foreign Ministers’ Dialogue”, where Foreign Ministers and delegates from member states of the mechanism for coordination and cooperation among Afghanistan’s neighbouring countries, as well as Afghan Interim Government Acting Foreign Minister Amir Khan Muttaqi, attended the meeting. Sheikh Mohammed bin Abdulrahman Al Thani, Qatar’s Deputy Prime Minister and Foreign Minister, and Retno Marsudi, Indonesia’s Foreign Minister, attended the meeting as guests. Those summit could be considered as a part of China’s summit diplomacy in Central Asia. In order to bolster China’s presence in the regional order, China often engages itself with multilateral regional summits. By holding the summit on Afghanistan, China shows its willingness to play the leading role Afghan Crisis, followed by the US withdrawal. China’s interest in Afghanistan is diverse, ranging from domestic security concern to economic and regional interest. The timing of this summit however also suggests that China is eager to show its concerns for international crises as the country has faced unprecedented criticism due to its close association with Russia and its position over Ukraine Crisis.
China’s Neighborhood Dialogue and Impact of Ukraine Crisis: Sovereignty in Afghanistan but not in Ukraine
Even if the Chinese side would not recognize it openly, the Ukraine Conflict and the strong alliance between the US and Europe over the crisis appeared to threaten China. China’s international image is damaged on the global stage when the international community debates China’s position on Ukraine and criticizes China for siding with Russia. The conflict in Ukraine has forced China to consider what role it should play. When it comes to external invasion or humanitarian intervention to protect the citizens of any such country in need, such as African countries with civil wars, Myanmar, and Afghanistan, the Chinese government, which always plays the “state-sovereignty” card in any internal crisis of states, did not have that option in the Ukraine Crisis. China’s official position on Ukraine, which was released on February 26th, stated that “all states’ (including Ukraine’s) sovereignty and territorial integrity should be respected and protected according to the UN Charter,” however China’s statement contradicts itself.
If China truly means what it claims in its statement, which is to defend Ukraine’s sovereignty, it must likewise reject Russia’s invasion of Ukraine. Although Chinese diplomats at the United Nations avoided using the word “state sovereignty,” it should be noted that during the early stages of the Ukraine Crisis, China’s ambassador to Ukraine stated that China respected Ukraine’s independence and territorial integrity. However, with statements like “China opposes the invocation of UN Charter Chapter VII that authorises the use of force and sanctions in United Nations Security Council (UNSC) resolutions, but believes that the UNSC should play a constructive role in resolving the Ukraine issue,” China’s questionable attitude toward the concept of state sovereignty is evident.
China’s diplomacy, particularly with developing countries, is heavily reliant on “image-building.” With the Ukraine crisis, it is more crucial than ever for China to be on the good side of at least some of those countries. Chinese policymakers are already wary about the Quad and Pacific alliance’s potential impact on China in the near future. With the exception of India, the Ukraine crisis appears to have brought quad members closer together. Wang Yi’s unexpected visit to India and invitation to Indian Prime Minister Narendra Modi to join the BRICS meeting could be considered as an opportunity for Beijing to enlist India’s support, as both countries remain neutral on Ukraine. China is likewise anxious about the US-EU alliance. There were no joint announcements or specific agreements struck during the recent EU-China conference. Since last year, when the EU imposed sanctions on China due to the human rights situation in Xinjiang, China has had a tumultuous relationship with the EU. During the summit, the EU also urged China to refrain from assisting Russia, which might undermine Western sanctions against Moscow. China’s trade blockade against Lithuania for having a Taiwanese representative office has heightened tensions between China and the European Union. As a result, China is concerned that if the EU aligns more closely with the US, China’s trade relationship with the EU, as well as large projects such as the Belt and Road Initiative, will be jeopardized. The EU is China’s largest trading partner and most EU countries are part of BRI.
Thus, the best bet for Chinese policymakers right now is to shift the conversation elsewhere, where China can also condemn the West, particularly the United States, for its “misdoings.” The US sanctions on Afghanistan have been denounced by China as ruthless misappropriation of Afghan assets. Besides, the scholarly and foreign policy circles of the West and particularly Japan and Taiwan, are debating if the Ukraine War will repeat itself in the Taiwan Strait. The pressure on China to maintain its status as a “responsible power” is paramount. Thus, with statements such as “we should urge the international community not to neglect the Afghan issue while focusing on the Ukraine issue, and continue to increase input in Afghanistan to help the Afghan people tide over the difficulties” coming from Chinese Foreign Minister Wang Yi is not a surprise. It is also the possible reason of Wang Yi’s sudden Afghanistan visit and the need for organising or launching yet another dialogue on “Afghanistan “Neighbouring Countries of Afghanistan Plus Afghanistan” Foreign Ministers’ Dialogue”. It is significant to note that the neighbouring countries of Afghanistan attended the dialogue are silent on human rights conditions of Uyghurs in Xinjiang, despite being members of organization of Islamic Co-operation (OIC).
Ukraine’s losses are China’s gains
The conflict in Ukraine will have major strategic consequences for Chinese foreign policy in the Indo-Pacific. It will promote the deepening of Russian–Chinese economic cooperation that will make both countries more resilient to Western economic pressure. Long-term instability in Europe will make it more difficult for the United States to boost its Pacific presence for years to come with significant US financial and military resources being drawn toward supporting Ukraine.
The conflict has demonstrated that the West is not able to impose sanctions on a major economy without damaging its own stability. The war has also shown the effectiveness of the Russian nuclear deterrent, making even a limited Western intervention unthinkable.
China will be the main beneficiary of the Ukraine crisis. But this is not reflected in China’s political rhetoric which has been carefully calculated to avoid any major fallout with the European Union and other developed countries, while also maintaining close cooperation with Russia.
The official Chinese position has remained consistent with the statement made by Chinese Foreign Minister Wang Yi in February 2022 at the outbreak of the war: China is concerned with the violence and wants it to stop. It maintains that the territorial integrity and security interests of all parties need to be respected. China also maintains that NATO enlargement is partially responsible for the crisis.
On the economic front, China has seized the major strategic opportunities provided by the war. During the first four months of 2022, trade between Russia and China increased by 25.9 per cent. Russian exports to China grew by 37.8 per cent, to US$30.85 billion. The physical volume of natural gas exports also jumped 15 per cent.
China is in line to supplant the European Union as Russia’s main economic partner. The Chinese Ambassador to Russia Zhang Hanhui has called upon Chinese businesspeople to ‘fill the void’ left in the Russian market by outgoing Western businesses. Cooperation with China has contributed to Russia’s federal budget surplus between January–April 2022 despite the war. Maintaining this financial and economic stability appears to be Russia’s strategy as it continues to press in Ukraine.
By 2023, most or all bilateral trade is expected to be conducted in renminbi. Chinese companies and brands will likely dominate large segments of the Russian consumer market and will become Russia’s key industrial and technological partners. There is also a growing trend towards a large part of Russian trade being conducted with third countries in renminbi.
With the expected expansion of the logistical infrastructure, China will obtain a major source of strategic commodities. China will be able to procure these commodities at significant discounts because Russia will be isolated from many other markets and China will be using its own currency. This will significantly reduce the West’s ability to leverage economic pressure points against China.
Some of China’s top-tier global companies are visibly reducing their presence in Russia because secondary sanctions could affect their operations in international markets. But cooperation in many areas will be overtaken by second-tier corporations with limited or no global exposure. Such companies will still be powerful enough to operate in the Russian market. Their operations will be serviced by specialised banks with no exposure in the West, like in Iran.
Strategically, this transition — coupled with deep internal changes in the Russian political economy — will make Russia largely immune to economic warfare. For the foreseeable future, the West will have no other means to deter Russia in Europe except for costly military options. In turn, this will provide major strategic opportunities for China in the Pacific.
The military lessons of the war for China are too early and too difficult to assess based on available data. One characteristic of the Ukrainian conflict is an unprecedented scale of propaganda and misinformation from all sides.
But two clear lessons have emerged from the war so far. First, US and NATO allies will always try to avoid a direct military confrontation with a major nuclear power. Even if a power is fighting a full-scale war at their doorstep. Second, economic war on Russia has caused significant problems for Western economies, including rising inflationary pressures and falling growth rates. Any comparable actions against China, an economy ten times bigger, will devastate much of the world economy. This makes any such action extremely unlikely.
From our partner RIAC
Taiwan dispute, regional stability in East Asia and US policy towards it
In the 1950s, armed confrontation erupted between the People’s Republic of China (PRC) and the Republic of China (ROC) over vital islands in the Taiwan Strait. ROC-controlled islands were bombarded by the PRC on two distinct occasions in the 1950s. The US retaliated by acting actively on favor of the ROC. Tensions in the Taiwan Strait were exacerbated by US policy toward East Asia during the early Cold War. In late 1949 and early 1950, American authorities were prepared to allow PRC forces to cross the Taiwan Strait and defeat Chiang, but when the Korean War broke out in June 1950, the US moved its Seventh Fleet into the Taiwan Strait to keep the conflict from expanding south. The advent of the Seventh Fleet enraged the Chinese Communists, who moved soldiers from Taiwan to the Korean front in preparation for an attack. This served to postpone military conflict in the Strait until after the Korean War, when the US withdrew its fleet.
Beijing claims there is only “One China,” of which Taiwan is a part. It considers the People’s Republic of China to be China’s only legitimate government, a position it refers to as the “One-China concept,” and desires Taiwan’s eventual “unification” with the mainland.
China, Mongolia, Taiwan, Tibet, and the South China Sea remain part of the ROC, according to Taiwan’s KMT-drafted constitution. The KMT opposes Taiwan’s independence and has repeatedly advocated for tighter ties with China. However, in light of recent election setbacks, KMT leaders have pondered whether the party’s position on the 1992 Consensus should be changed. The Democratic Progressive Party (DPP), the KMT’s main adversary, has never supported the 1992 Consensus’s understanding. President Tsai, who is also the DPP’s leader, has refused to recognize the consensus in writing. Instead, she has endeavored to find a different formulation that Beijing will accept. Tsai declared she was “Elected President in accordance with the Constitution of the Republic of China,” which is a One-China document, and that she would “Safeguard the Sovereignty and Territory of the Republic of China” in her 2016 inaugural address. Tsai also promised to “Handle Cross-Strait Affairs in accordance with the Republic of China Constitution, the Act Governing Relations Between People of Taiwan Area and the People of the Mainland Area, and other applicable legislation.” Beijing, on the other hand, rejected this statement and severed ties with Taiwan.
UN Membership Status for Taiwan
China directly rejects the participation of Taiwan in other international organizations that only allow governments to join. Taiwan complains its absence on a regular basis, while the US advocates for Taiwan’s meaningful involvement in such groups. Taiwan, on the other hand, is a member of over forty organizations, the most of which are regional in nature, such as the Asian Development Bank and the Asia-Pacific Economic Cooperation Forum, as well as the World Trade Organization. On several additional bodies, it has observer or other status. Only fourteen countries have formal diplomatic relations with Taiwan. No government has ever maintained formal diplomatic relations with both China and Taiwan at the same time.
Economic Situation of Taiwan
Taiwan’s economy is still based on trade with China, the island’s most important commercial partner. However, their economic relationship has been strained in recent years, partially as a result of Beijing’s pressure on Taiwan and Taiwanese leaders’ rising concerns about the island’s overdependence on Chinese trade. President Ma, who served from 2008 to 2016, signed over twenty agreements with the PRC, notably the 2010 Cross-Straits Economic Cooperation Framework Agreement, in which the two countries agreed to remove trade barriers. Direct sea, air, and mail ties between China and Taiwan were reestablished after decades of prohibition. They also agreed that banks, insurers, and other financial service providers would be permitted to operate in both markets. Tsai’s main program, the New Southbound Policy, has had some success in increasing trade and investment with Southeast Asian and Indo-Pacific countries. Between 2016, when the project was announced, and 2021, trade between Taiwan and the eighteen nations increased by more than $50 billion. Nonetheless, Taiwan’s exports to China reached an all-time high in 2021. Beijing has exerted pressure on other countries to refrain from signing free trade deals with Taiwan. Only a few nations have signed free trade agreements with the island, with New Zealand and Singapore being the only industrialized economies to do so.
The United States and the People’s Republic of China established formal diplomatic ties in 1979. At the same time, it cut diplomatic ties with the ROC and terminated their mutual defense treaty. However, the US maintains a strong unofficial relationship with the island, selling defense weapons to its military. Beijing has frequently pushed the US to stop sending weapons to Taiwan and to cut ties with the country. The United States’ strategy is guided by its One-China policy. It is based on a number of documents, including three US-China communiqués issued in 1972, 1978, and 1982; the Taiwan Relations Act, passed by the US Congress in 1979; and President Ronald Reagan’s recently disclosed “Six Assurances”, which he delivered to Taiwan in 1982. According to these documents, the United States:
“Acknowledges the Chinese stance that there is only one China and Taiwan is a part of China” and that the PRC is the “only lawful government of China”
Disposes the use of force to resolve the conflict; maintains cultural, commercial, and other ties with Taiwan through the American Institute in Taiwan (AIT), commits to selling arms to Taiwan for self-defense and maintains the ability to come to Taiwan’s defense while not committing to do so, a policy known as Strategic Ambiguity was created.
The major purpose of the United States is to maintain peace and stability in the Taiwan Strait and it has urged both Beijing and Taipei to do so. It declares that it opposes Taiwanese independence. For decades, the US has tried to strike a careful balance between backing Taiwan and avoiding a confrontation with China through its policy of strategic ambiguity.
Over Chinese protests, the US strengthened ties with Taiwan under President Donald Trump, selling over $18 billion in armaments to the military and erecting a $250 million facility for its de facto embassy in Taipei. Tsai and Trump spoke by phone before Trump’s inauguration, the greatest degree of engagement between the two since 1979. He also dispatched several top administration officials to Taipei, including a cabinet member, and the State Department lifted long-standing limitations on where and how US officials can meet with their Taiwanese counterparts during his final days in office.
Biden’s Administrative and Military Relations with Taiwan
The Biden administration has taken a similar approach, maintained arms shipments and endorsed Trump’s decision to allow US officials to meet with Taiwanese officials more freely. Biden was the first president of the United States to invite Taiwanese officials to the inauguration. The US regularly sails ships across the Taiwan Strait to demonstrate its military presence in the region, and it has encouraged Taiwan to raise its defense budget. The United States has been more supportive of Taiwan in recent years than it had been before China adopted a rejectionist stance toward the current Taiwanese government. On cross-strait problems, Tsai has been noticeably and consistently moderate. The fact that she would push the limit by declaring full formal independence is not a risk Beijing has to be concerned about. During Tsai’s presidency, Washington has increased its support for Taiwan, primarily in response to Beijing’s increasing pressure on the island. The Biden administration has a variety of grievances about Chinese behavior and its coercion of Taiwan has been towards the top of that list, as seen by congressional legislation and presidential and administration policy comments.
U-S Implications for Strategic Stability over Taiwan Issues
Strategic stability refers to a condition in which both the United States and China can pursue their key national interests without jeopardizing, if not increasing, regional and global stability. Such strategic stability may also help to establish a pattern of bilateral relations that decreases the likelihood of accidental conflict particularly military conflict while simultaneously enhancing the possibilities for future collaboration. However, the reality on all three sides make stability appear like a far-off dream. Beijing has made it obvious that it feels its national might is quickly expanding and that it will soon be enough to exercise diplomatic, economic, and military supremacy, at least in the western Pacific. Furthermore, the realities of Beijing’s expanding power have allowed it to engage in resentment diplomacy, accusing the US and other foreign powers of being responsible for China’s “Century of Humiliation” and demanding retribution. If strategic stability is to be achieved, it must begin here for the US to change its policies toward Taiwan and China, they must opt.
Both militaries have increased their capabilities in order to dissuade and defeat the other. The two countries have moved from rivalry to conflict, and both have made establishing Taiwan’s future the focal point of that clash on numerous occasions. Taiwan, whether you call it a pawn or not, is caught in the crossfire. As a result, lowering tensions over Taiwan might be the first step toward avoiding potentially devastating instability and, possibly, developing a cautious trust on both sides that other lingering problems can be resolved successfully. A reinforced US policy of dual deterrence, coupled with authoritative assurance, can be a first step toward restoring trust in enormous strategic stability between these two superpowers.
Fujian Aircraft Carrier Owes Its Existence to the BRI
With China officially launching its aircraft carrier Fujian, questions have arisen concerning such a development. Here, we have answered some questions on different levels according to the timeline, so as to present a clearer picture of the situation, showing the close relations between China’s economy and the country’s national defense.
As things stand, the vessel, referred to as a Type 003 carrier, owes its existence to China’s Belt and Road Initiative (BRI) and the “golden decade” in its economic development.
The emergence of the BRI requires China to defend its maritime routes. In the hypothetical scenario where the BRI does not exist, China’s geopolitical interest would not have expanded to the extent that a blue-water navy is necessary. Ukraine for instance has no navy at all, yet it still can control the Black Sea with shore-based “Harpoon” missiles. Therefore, without global interests, there would be no aircraft carrier today.
It should be remembered that not only the construction, but also the maintenance of aircraft carriers would require financial resources, and such resources were obtained through China’s economic development. In Russia’s case, after the disintegration of the Soviet Union and the collapse of Russia’s economy, its aircraft carrier fleet had to be disbanded, and this is a good example of the relations between the national defense with the economy. It is precisely because of the “Golden Decade” of China’s economy that laid the foundation for the country to establish its blue-water navy today.
The next question is, why did China launch the BRI? How did such an initiative come into being?
With China emerging as the major manufacturer for the rest of the world, conflicts follow suit. Furthermore, overcapacity eventually kept the price down, then came the overstocked inventory and debts. In resolving such issues, I had thought of the principle of the Marshall Plan, and this formed the predecessor and foundation of the BRI. Any detailed discussion on this topic would be long and arduous, yet in essence, the focus is on transferring production capacity, increasing investment in the world, transferring capital, and so on. These are all, in fact, related to resolving China’s own problems, that is to maintain its stable development.
This suggestion has attracted the attention of the Chinese leadership, and related policies were eventually introduced. After such a formation process, the policy was finally implemented as the BRI. It is now harder for the public to find books and narratives about the formation process of the BRI. The reason is that most did not go through such a process at all, and many only participated in it later. This, of course, does not mean that the policy formation process did not exist. After all, there is cause and effect for everything. As for the subsequent implementation results of the grand plan of the BRI, how a large number of projects went out of control is a different story, with its own causes and consequences.
The final question is, why did the “golden decade” come into play in China?
The BRI has created numerous demands, as was originally intended. In those years, not only did Chinese enterprises become larger and more prominent, but the annual growth rate of the government’s fiscal year also far exceeded the growth rate of GDP. It was such an accumulation of financial resources that supported the construction and development of aircraft carriers and other grand projects.
It is common knowledge that China’s economy entered a high growth stage after the year 2000. The annual economic growth rate was more than 10%, i.e., at a double-digit growth stage. Even when faced with the Wall Street financial crisis in 2008, China reacted by issuing an RMB 4 trillion economic stimulus package and the crisis did not impact the country much. The downturn in China’s economy was something that happened after 2012, and there are hard data that can prove this.
The so-called “golden decade” refers to an approximate time period where the main growth drivers are as follows: 1. The presence of a large amount of foreign investment and the continuous investment of foreign companies in China, making the country the world’s factory during that time. 2. China’s large number of net exports supported its economic growth. 3. Urbanization drove the development of the real estate sector, which in turn pushed the Chinese consumption and supported the economic growth. 4. China’s currency issuance, as well as investment, had driven its economic development. As it is well-known, the country’s economic growth is investment-driven. These factors worked together to form China’s “golden decade” and promote the rise of its economy into a salient global force.
The financial resources generated enabled the country to undertake various projects, including constructing aircraft carriers. Some of these projects were unimaginable in the past, yet China managed to accomplish them, such as high-speed rail networks, manned spaceflight, and so on. However, all these needed both demand and money. Of course, demand and money do not exist out of thin air, and there are driving factors behind them.
As an independent think tank, ANBOUND has the honor of participating in these great processes to a certain extent at a fundamental level through the construction of public policies, as well as in policy formation. Here, we briefly introduce some of the logical relationships and basic principles.
Looking into the future, China will face continuous challenges. From the point of view of naval projects such as aircraft carriers, as an important military asset in the future, their very existence will require more financial resources. To sustain them, China will either need to continue gaining money or it will need to tighten its belt. These are the only two options left for China.
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