“Ultimate excellence lies not in winning every battle, but in defeating the enemy without ever fighting.”
China’s geoeconomic strategy harks back to this famous maxim by Sun Tzu. China has become the world’s leading practitioner of geoeconomics and it has been perhaps the most important factor in “returning regional or global power projection back to an important economic (as opposed to political-military) exercise,” as argued by Robert Blackwill and Jennifer Harris in their 2016 book, War by Other Means: Geoeconomics and Statecraft. China’s remarkable economic growth has contributed significantly to rebalancing the global economic power dynamics. China conducts foreign policy through economics simply because ‘it can’. Geoeconomics is the name given to a newer Balance of Power approach which means the use of economic instruments (from trade and investment policy to sanctions, cyberattacks, and foreign aid) to achieve geo-political goals.
Maneuvering the Weak and resisting the West
China is currently the largest trading partner for over 130 countries—- including the major Asian economies. In economic relations today, China is just doing what Henry Kissinger wrote in his book On China, “Far better than challenging the enemy on the field of battle is…..maneuvering him into an unfavorable position from which escape is impossible.” States have thus become so much dependent on China’s supply of key imports, and on Chinese markets for exports that whenever any kind of disagreement arises China just uses its power to delay exports and imports so that states do not dare to irk China. Notable cases in this regard include China’s abrupt cessation of all exports of rare metals to Japan in 2010 (to persuade Japan to return several Chinese fishermen it had detained); its zeroing out of salmon purchases from what had been Norway’s number-one market in 2011 (to punish Norway for the Nobel Peace Prize committee’s selection of a noted Chinese dissident, Liu Xiaobo); and its prolonged inspection of bananas from the Philippines until they had rotted on the docks in 2012 (to change the Filipino government’s calculations about a dispute over Scarborough Shoal in the South China Sea).
China’s strategy of becoming self-sufficient or ‘starting its own club rather than playing by the West’s rule’ was evident since the early 2000s. The formation of BRICS by China post the Great Recession and financial crisis of 2008 was the first step in that direction. BRICS—Brazil, Russia, India, China, and South Africa— was established as a group of rapidly expanding economies capable of making decisions and taking actions without supervision from the United States or the G7. Apart from that, China’s establishment of its own competitive institution – the Asian Infrastructure Investment Bank (AIIB) in 2013 after years of failed negotiations with the United States’ to accommodate the request for a larger share of the votes at the World Bank, stunned Washington. Despite an intense campaign by Washington to pressure nations not to join China’s bank, 57 states already signed up before it was launched in 2015—including some of America’s key allies, with the UK in the lead. These states said no to the United States and yes to China in the hope of receiving loans at below-market rates and contracts for large construction projects funded by the bank. Other Chinese initiatives like the Belt and Road Initiative (BRI previously known as the One Belt One Road- OBOR) aims to link sixty-five countries in Asia, Europe, and North Africa with a combined population of 4.4 billion people. China is thus constructing a network of highways, fast railroads, airports, ports, pipelines, power transmission lines, and fiber-optic cables across Eurasia. Therefore, China’s economic network is spreading across the globe, altering the international balance of power in a way that causes even longtime US allies in Asia to tilt from the US toward China. China is also using the Debt-trap diplomacy (DTD), a relatively new Chinese policy tool connected to BRI. DTD builds on the approach that China intentionally excessively lends money to low-income indebted states that cannot later repay Chinese debt. The borrowing state thus relinquishes some of its strategic assets to decrease its debt burden towards China (debt-for-equity swap).
A Different Path towards Success?
China is following a different trajectory than did the United States during its own surge to primacy. The question which looms large throughout the world is “What does President Xi Jinping’s China want?” And the answer to that in one line is: to make China great again. The deepest aspiration of over a billion Chinese citizens is to make their nation not only rich, but also powerful. Indeed, their goal is a China so rich and so powerful that other nations will have no choice but to recognize its interests and give it the respect that it deserves. This is what is called the “China Dream.”
China’s efforts to strengthen regional multilateral cooperation across Eurasia through the BRI are strongly motivated by a complex or a multifaceted grand strategy. First, China makes use of the BRI as a vital tool of soft balancing to frustrate the US containment and encirclement of China, and undermine its dominance in Eurasia and beyond. Second, China intends to substitute existing ideas and norms with newer alternatives and build its role as a normative power through the BRI for fostering the legitimacy of its rising power. Third, China seeks to form a bargaining coalition through the BRI and AIIB to reshape global governance and transform the existing international system in a way that reflects its values, interests and status. Overall, the BRI serves as a decisive strategic maneuver for China to ensure security and promote power status in the international order, moving from a “rule-taker to rule-maker.”
Conclusion
China’s emergence as the number-one power in Asia—and its aspiration to be number one in the world—reflects not just the imperative of economic growth but also a supremacist world view bound up in Chinese identity. As rightly quoted by Napoleon in 1817, “Let China sleep; when she wakes, she will shake the world.”
References:
1) Blackwill, Robert and Harris, Jennifer “ War by Other Means: Geoeconomics and Statecraft” (Cambridge, MA: Harvard University Press, 2016), 11.
2) . Henry Kissinger, On China (New York: Penguin Books, 2012), 28
3) James Kynge, “China Becomes Global Leader in Development Finance,” Financial Times, May 17, 2016, https://www.ft.com/content/b995cc7a-1c33-11e6-a7bc-ee846770ec15
4) Allison, Graham. “Destined for War: Can America and China Escape Thucydides’s Trap?” (Houghton Mifflin Harcourt, Boston, New York, 2017), 10-30.
5) Proroković, D., & Stekić, N. (2024). New Balance of Power in the International Relations and the Role of China. Institute of International Politics and Economics; Faculty of Security, University; Sapienza University, Department of Political Science; Austin Peay State University.
6) Zhou, W., & Esteban, M. (2018). Beyond balancing: China’s approach towards the Belt and Road Initiative. Journal of Contemporary China, 27(112), 487-501.
7) Himmer, M., & Rod, Z. (2022). Chinese debt trap diplomacy: reality or myth?. Journal of the Indian Ocean Region, 18(3), 250-272.
