Nancy Pelosi in Taiwan: What lies ahead for China and the US? Expert comment GBhardwaj 3 August 2022

Chatham House experts examine the implications for Taiwan, China and the United States of Nancy Pelosi’s visit to the island.

China’s fading ties with Washington?

Dr Yu Jie

US House Speaker, Nancy Pelosi’s, visit to Taiwan has plunged China-US relations into a new low as the reservoir of trust forged between the two sides over the last 40 years appears to be almost exhausted.

However, her move will likely not result in the full-scale crisis across the Taiwan strait that some hawkish voices in both Beijing and Washington believe. Instead, Beijing will most likely offer a combination of military posturing toward the US navy and economic sanctions on Taiwanese agricultural and manufacturing products in order to send a clear bellwether to any future potential visits by high-level Western political figures.

Neither Beijing nor Washington has declared a willingness to change the current status quo as the present impasse benefits both governments – but for different reasons. For China, the best approach is to reach a military and economic capability that prevents US engagement with Taiwan without the use of force. For the US, the strategic ambiguity under the Taiwan Relations Act remains an effective card to counter China’s growing military influence in the Indo-Pacific and keep itself relevant within the region as a security guarantor. Yet, both sides have decided to kick the issue of Taiwan’s status down the road, believing that time is ultimately on their side.

Despite a chorus of nationalistic rhetoric, China will be careful not to stumble into an accidental conflict which risks colossal damage on all fronts. Chinese President, Xi Jinping, must weigh all of the options before him as Beijing cannot afford to be perceived as unilaterally seeking to change what it agreed with the US back in 1979 when ties were re-established. If that happens, it will provoke the US political establishment to reach a unanimous agreement to change its ‘One China Policy’ and, ahead of the 20th Communist Party Congress where Xi is expected to be crowned for a historic third term, the last thing he wants is an unnecessary conflict with Taiwan.

The road to escalation?

Dr Bill Hayton

Beijing has chosen to take issue over Nancy Pelosi’s visit to Taiwan in a way that it did not do for other recent US Congressional visits to the island. Several high-ranking US senators visited in April and May this year yet none of these visits triggered the prospect of a cross-strait crisis. So why has Beijing chosen to turn Pelosi’s visit into a stand-off?

Pelosi’s visit is part of a performance in which both actors – the US and China – are playing primarily for their domestic audiences. This comes at a time when ruling circles in Beijing are preparing for the five-yearly Communist Party Congress. Amid a slowing economy and successive COVID-19 variants, Xi Jinping cannot afford to look weak as he prepares the ground for his third term of office. Meanwhile, the US, represented either by President Joe Biden or House Speaker Pelosi, cannot back down at this point without looking weak itself.

Both sides have moved military assets into strategic positions near Taiwan to demonstrate their resolve. Neither side wants confrontation yet neither wishes to be humiliated. Currently, Pelosi’s visit, amid posturing by China, will make the US appear strong, but the consequences are likely to play out over a longer period. Xi Jinping will need to appear to have recaptured the initiative between now and the congress in the autumn when the risk of an incident will be at its greatest.

Taiwan controls several isolated islands that could be pressured by Chinese forces in the event of a future crisis. The Kinmen and Matsu archipelagos lie just a few miles off the coast of the mainland and have been at the centre of previous confrontations. There are also two other points of concern. Pratas Island – known as Dongsha – sits halfway between Taiwan and Hong Kong. Itu Aba – known as Taiping – is the largest of the Spratly Islands in the centre of the South China Sea. All would be vulnerable to an attack by the People’s Liberation Army, the principal military force of China, and the armed wing of the Chinese Communist Party.

A military confrontation between China and the US over Taiwan, or further south in the South China Sea, would have major impacts on regional and global trade. An estimated $300 billion worth of trade passes through the area every month. Japan and South Korea depend heavily on flows of oil and gas through the sea. Exports from Vietnam, Malaysia, Indonesia and the Philippines would also be heavily affected by disruptions to shipping, increased insurance costs and interruptions in inflows of raw materials. The impact on a world economy already suffering major disruption because of the Russian invasion of Ukraine and the lingering effects of COVID-19 would indeed be stark.

Is a shift in US policy on the cards?

Dr Leslie Vinjamuri

Nancy Pelosi’s visit to Taiwan will undoubtedly be seen as a provocation by Beijing – even if it should not be. Pelosi’s trip to the Indo-Pacific, which also includes visits to Singapore, Malaysia, South Korea and Japan, comes at a time of growing tension between the US and China in the region.

It also comes at a time when the divide among Washington’s foreign policy elite is growing, with some arguing that it is time to abandon the country’s policy of ‘strategic ambiguity’, where it refrains from stating how it would react were China to openly and deliberately attack Taiwan. Indeed, recent statements by President Joe Biden have raised questions about whether the US is set to make a policy change. But, since both its ‘One China Policy’ and policy of strategic ambiguity have been largely successful, it would be wise for the US to maintain them.

During her visit, Pelosi is likely to reaffirm the US’ high regard for Taiwan’s democracy and embrace the language of shared values. She has embraced Biden’s framing of international relations as a contest between democracies and autocracies. This alone will continue to exacerbate tensions. It would be a mistake, though, to signal a major policy change away from strategic ambiguity and towards strategic clarity on Taiwan’s status. Even if the US decides later to embrace a policy shift of this size, such a message should be carefully considered and communicated clearly, and not by chance.

Congress has an important role to play but President Joe Biden and his national security team should make the final decision on US policy towards Taiwan. Getting the signals right in international politics is a key part of deterrence and, especially in East Asia, deterring both China and Taiwan’s ambitions is essential. 

Increasing insecurity in the region?

Dr John Nilsson-Wright and Ben Bland

Nancy Pelosi’s visit to Taiwan has provoked mixed responses from US allies across Asia.

For Japanese policymakers, the Taiwan issue is connected to the wider issue of regional security. Fears that a military conflict over the island will inevitably draw Japanese self-defense forces into a shooting war with China – a development that is neither formally mandated under the terms of the US-Japan Mutual Security Treaty nor necessarily constitutionally sanctioned – explains the concerns in Tokyo.

While the Japanese government of Prime Minister Fumio Kishida is increasingly worried about China’s growing military presence in the East and South China Seas, Japan’s heavy trade dependence on China and the country’s economic and security vulnerabilities make it imperative to avoid any further escalation of tensions.

Given Tokyo’s non-recognition policy towards Taiwan, Japanese ties with Taipei are handled informally by politicians of the governing Liberal Democratic Party (LDP), rather than at cabinet or foreign ministry level, and in recent weeks and months there has been an increase in visits by cross party delegations from Japan.

The death of former Prime Minister Shinzo Abe as removed from public life a vocal advocate in support of enhanced ties between Tokyo and Taipei, but with public opinion in Japan increasingly tilting in an anti-Chinese direction, and with younger politicians favouring a more combative approach towards Beijing, there is a risk that the government will face pressure at home to toughen its language on Taiwan. Bolstering deterrence through increased military cooperation among allies, along with a graduated increase in defence spending, is the best way of limiting risk over Taiwan.

Nevertheless, privately, many officials in Tokyo are likely to have viewed the Pelosi visit as an unhelpful intervention and will be puzzled and perhaps frustrated by the apparent inability of the Biden administration to persuade the US Speaker of the House of Representatives to cancel her visit.

In South Korea, the government of President Yoon Suk-yeol, faces similar pressures to Japan, given the heavy dependence of the South Korean economy on China for trade and investment opportunities.

Pelosi’s visit to the region will strikingly not include meetings with either the president or Foreign Minister Park Jin. With Yoon on vacation and Park attending the ASEAN Regional Forum meeting in Cambodia, the absence of high profile engagements for Pelosi might seem to be a purely practical matter, but Seoul may also be seeking to avoid antagonizing Beijing at a time when the Chinese government is seeking to pressure South Korea not to enhance alliance coordination with the United States and Japan or to expand its commitment to the controversial Terminal High Altitude Area Defence (THAAD) missile defence system.

As in Japan, public opinion in South Korea is increasingly anti-Chinese, but the logic of regional economic and security uncertainty, requires the Yoon government to avoid getting trapped in a worsening stand-off with Beijing.

China’s renewed influence in the Gulf Interview LJefferson 14 April 2023

By disseminating narratives of its own supremacy, China deepened relations with the Gulf during the COVID-19 pandemic.

China has used the COVID-19 pandemic as an opportunity to rebrand its international role as a ‘responsible’ and ‘great’ power by voicing narratives of its own supremacy to regions like the Gulf.

In this interview, Julia Gurol-Haller draws on her International Affairs article to trace how the UAE, Saudi Arabia, Qatar and Iran have responded to China’s narratives, with key implications for Sino-US competition and regional autonomy for the Gulf. This illustrates how words and narratives help bolster authoritarian power.

What have the China-Gulf relations looked like in context of the COVID-19 pandemic?

Bilateral relations between China and the Gulf countries have grown in importance over the past decade, particularly since 2013 with the Belt and Road Initiative. The Gulf plays a crucial role in China’s Belt and Road Initiative and its westward expansion, owing to its favourable geographic position and proximity to the Red Sea. 

In the beginning, transregional relations were mainly economic partnerships since China has a growing appetite for oil and gas and the Gulf monarchies fulfil these needs. China is one of the most important markets for Saudi Arabia, the UAE, and Qatar to export these goods.

Over time, we’ve seen the Sino-Gulf relations expand beyond just economic ties and towards policy fields like security and cultural relations. While these processes were already in place, they were boosted during the COVID-19 pandemic, not only in material terms but also in respect of Chinese attempts to advance its soft power, leverage, and influence in the Gulf region.

When COVID-19 began to ravage the globe, China took that window of opportunity to rebrand its international role. Through efforts such as mask diplomacy, vaccine diplomacy and the strategic diffusion of narratives, China tried to project its image as a ‘global saviour’ and a responsible and great power.

The Gulf monarchies and Iran were among the main target audiences for this public diplomacy campaign. So, the COVID-19 pandemic has been a catalysing factor for deepening relations between China and the Gulf region.

What exactly are narratives and why are they important in China’s approach to the Gulf states during the COVID-19 pandemic?

Through diplomatic statements, news outlets and social media, China has engaged in, what I call, a ‘narrative power-play’. To understand what that is, we need to understand the political importance of narratives.

Narratives are deliberately constructed by (political) actors to influence a certain target audience. In authoritarian contexts, narratives are a useful resource for political actors to bind audiences to their rule and to appeal to people’s emotions by strategically projecting certain images. 

Ultimately, this creates linkages via attraction or persuasion that enhance the actors’ legitimacy and consolidate their power. So, in the narrative power-play, authoritarian leaders function as ‘storytellers-in-chief’, shaping reality in their favour.

What kinds of narratives has China disseminated to the Gulf region in backdrop of the COVID-19 pandemic?

There are two sets of narratives that China disseminated to the Gulf: narratives of supremacy and narratives of a new world order.

China disseminates narratives of systemic supremacy which include praising the overall efficiency of its governance structures. For instance, the Chinese political system is presented as highly efficient and centralized. It has high amounts of ‘state capacity’ for mobilization and the ability to ‘quickly adapt’ to changing situations.

Narratives of performative supremacy refer to the tangible performance of the Chinese Communist Party or China as a whole, such as economic performance, performance in governance, provision of public goods or pandemic response. The performance narratives also highlight the ‘incredible logistical efficacy’, the highly professionalized medical sector and the innovative scientific sector. 

Narratives of normative supremacy are often informed by nationalist notions such as the reclaiming of China’s rightful position in the world and negative feelings towards Western imperial powers who are depicted as having inflicted great pains on China during the ‘century of humiliation’. Overall, these narratives serve to depict China as a responsible, caring and loyal world power that helps other states. The whole idea of mask diplomacy was also carved into that notion of China’s normative supremacy.

Together, China has used these narratives to construct the idea of a new world order in which China is believed to play a much bigger role. The world order narratives are closely linked to stories about the failure of the Western system and show the intertwinement of practices of othering and self-glorification that can also be observed in Chinese official media narratives in other contexts such as diplomatic stand-offs with the United States.

What do these narratives tell us about how China understands the world order?

The narratives China disseminated to the Gulf region show that in the Chinese understanding of politics, the world order is in flux and undergoing major power reconfigurations. For China, this implies a window of opportunity to position itself as a responsible and great power and move from the side-lines to the centre stage of international politics.

This is a trend that has been long in the making in Chinese foreign policy. For instance, the launch of the Chinese Global Security Initiative or the recent brokering of the Iran-Saudi rapprochement agreement show clearly that China is becoming much more than an economic powerhouse and is adopting a more proactive foreign policy.

During the recent state visit of Xi Jinping to Moscow, he said at one point that China stands ready to ‘safeguard (…) the international order underpinned by international law ’. These examples are quite telling regarding the role China ascribes itself on the international stage.

How have the Gulf countries responded to China’s power narratives during the COVID-19 pandemic?

Saudi Arabia, the UAE, Qatar and Iran all picked up the narrative of China’s superior performance during the global crisis. That was a unified response, but they did that to different degrees and by highlighting different aspects.

The strongest reproduction of Chinese narratives can be found in the Emirati media. They buy into the story of the COVID-19 pandemic as evoking a global power shift, which includes a decline of US hegemony and a corresponding rise of China. The explicit wording of Chinese narratives such as ‘community of shared future of humankind’ has been picked up word-for-word by some Emirati media outlets.

Iranian newspapers have also reproduced Chinese narratives. However, the difference is that they also praise China’s unconditional solidarity during the COVID-19 pandemic, which is believed to be superior and more ‘responsible’ than the ostensible individualism of the West. This tells us a lot about Iran’s relationship with the West and how China is believed to be a lifeline or anchor for stability.

Saudi Arabia has been more cautious in reproducing the Chinese narratives. While it does not contest China’s role in containing the COVID-19 pandemic, Saudi Arabia has adopted a more inward-looking perspective, stressing its own role as a responsible regional player during the pandemic.

This might be explained by the kingdom’s own regional leadership claims and the attempt to use the crisis as an opportunity to strengthen this role. The most pressing questions seem to be whether the post-COVID world will be a multipolar order, and what Saudi Arabia’s own position within it might be. 

The UK must avoid conflict with Europe and China Expert comment NCapeling 10 October 2022

Liz Truss says she wants to take a tough line but any freedom to forge her own foreign policy is a casualty of the economic turmoil following her first budget.

The tax-cutting budget from new UK chancellor Kwasi Kwarteng was clearly not inhibited by any apparent concern for the markets’ response. But the interest rate rise it contributed to and the scepticism raining down on the Truss government should force a recognition that economic vulnerability now constrains what the UK tries to do abroad.

That would mean taking a more cautious approach than the new UK prime minister seems to want to adopt. The Treasury and the Foreign, Commonwealth and Development Office (FCDO) may sit next to each other in Whitehall’s parade of 18th century buildings, but a huge gulf lies between them.

When talking to officials, it is striking how those in one building make decisions without reference to the other. Foreign policy is made with no consideration of the UK’s need to borrow money in the markets, and budgets are written with little calculation of the effect of decisions next door – although the Cabinet Office does at least try to reconcile these.

But that approach is a luxury which the budget response and the sharp rise in national debt it will bring makes no longer affordable.

Repairing EU trade relations is priority

The first lesson is that any worsening of trade relations with the European Union (EU) is not now something the UK can afford to contemplate. The markets would take an even dimmer view of national finances if the UK were to become embroiled in an even more fractious trade dispute with its closest and largest trading partner.

When campaigning for the Conservative party leadership, Liz Truss talked tough on the Northern Ireland protocol and her unwillingness to compromise much with the EU. Since she became prime minister, sounds from both the UK and EU have been much more conciliatory, with suggestions that a deal could be just a few details away.

And yet the Truss government is still pressing ahead with the controversial legislation which would enable the UK unilaterally to walk away from parts of the treaty it signed – the House of Lords will debate the bill and its most contentious measures, such as the extensive new powers it gives ministers, on 11 October.

But there are suggestions from officials that, although Truss would lose too much face by withdrawing the legislation, the government may choose not to contest any Lords amendments vigorously.

That would be wise. The prime minister should know the financial path she has chosen with her chancellor makes carrying out the threats of walking away from a deal too costly to afford. As it is, the markets are hardly looking with equanimity on the prospect of the UK borrowing £100 billion to shield consumers from rising gas prices.

A £43 billion package of proposed tax cuts with no explanation – yet – of how the government will pay for them would be even less comfortable were the UK to take such a hard line on the Northern Ireland protocol that it provokes a trade war with the EU. Brussels can also make those calculations and, for all the recent talk of concessions, is expected to hold fast to its new position.

For the same reasons, the UK cannot afford to talk about taking a tougher line on China – as the prime minister has already done – without clearly knowing what the economic impact would be and being sure voters are prepared to pay this price. Years of courting commercial links with China mean they now weave their way through the UK economy.

The dependence of universities on Chinese students and the income they bring is already well-known and heavily debated – but the exposure of the UK economy to digital technology and components from China is even greater, and China is now the largest source of imports for the UK with £63.6 billion or 13.3 per cent of all goods imports according to the Office for National Statistics.

Much of that was laptops, computers, telecoms and phones as well as toys and clothes; there are few households or offices that will not have these products. China is also the sixth largest destination for UK exports, with £18.8 billion or 5.8 per cent of goods exports, much of it machinery and cars.

Scottish Liberal Democrat peer Lord Purvis expressed concern at these figures because of the implication that the UK’s ability to take a tough line with China on human rights was now enormously circumscribed. And defence and intelligence chiefs are also warning of the UK’s vulnerability.

Taking a hard line needs context

There are signs the government is concerned enough to begin to map out this economic vulnerability but no signs that it yet has a full picture. Without knowing the economic hit of a frostier relationship, and confidence the House of Commons accepts it, Liz Truss would be brave to label China ‘a threat to national security’ – as her supporters indicated during the leadership campaign – when she updates the integrated review of defence and security in the coming months.

Of course, foreign policy should not be inspired by commercial concerns alone. There are wider reasons to develop a clearer China strategy to help lay out a more consistent future path. On his recent trip to East Asia, UK foreign secretary James Cleverly heard from UK partners that they were disconcerted by the lurch from George Osborne’s ‘golden years’ to the Truss charge of a China ‘threat’.

When Liz Truss was UK foreign secretary, some forecast she would pursue mercantilism given her focus on forging post-Brexit trade deals but, as it turned out, that was not the spirit of her tenure.

Independent Thinking: War in Ukraine, Congress in China Audio NCapeling 21 October 2022

The inaugural episode of our new podcast examines the latest developments surrounding Russia’s invasion of Ukraine, and Xi Jinping’s political report from the 20th National Congress of the Chinese Communist Party.

Bronwen Maddox and her guests examine latest developments surrounding Russia’s invasion of Ukraine and Vladimir Putin’s nuclear threats, as well as Xi Jinping’s political report from the 20th National Congress of the Chinese Communist Party.  

Bronwen is joined by Gideon Rachman, chief foreign affairs columnist for the Financial Times, Orysia Lutsevych, head of the Ukraine Forum at Chatham House, and Dr Yu Jie, senior research fellow in Chatham House’s Asia-Pacific programme.

Independent Thinking is a regular podcast hosted by Chatham House director Bronwen Maddox, in conversation with leading policymakers, journalists, and Chatham House experts to provide insight on the latest international issues.

Independent Thinking: China protests, North Korea missile tests Audio NCapeling 1 December 2022

Episode seven of our new weekly podcast examines the civil unrest in China and the ongoing development of North Korea’s nuclear weapons programme.

Anti-lockdown protests are sweeping the cities of Beijing, Shanghai, and Guangzhou. What does the unrest say about China’s response to COVID-19? How serious a challenge is it to Xi Jinping’s legitimacy so soon after the Party Congress?

Meanwhile, 2022 has been a record year for Pyongyang’s ballistic missile launches. How far has North Korea’s nuclear programme and its missile systems developed, and what does it mean for the country’s neighbours?

Joining Bronwen Maddox in the studio this week from the Chatham House Asia-Pacific programme are its director Ben Bland and senior research fellow Dr Yu Jie. Joining the panel is special guest Ankit Panda, the Stanton senior fellow at the Carnegie Endowment for International Peace, and editor-at-large for The Diplomat magazine.

About Independent Thinking

A weekly podcast hosted by Chatham House director Bronwen Maddox, in conversation with leading policymakers, journalists, and Chatham House experts providing insight on the latest international issues.

UK is too tight on the money and too vague on China Expert comment NCapeling 13 March 2023

The new UK Integrated Review fills gaps left by the last one but is dominated by defence. It needs more clarity on Europe, trade, and development – and more money.

Following a long two years, the UK’s Integrated Review from March 2021 now looks prescient in calling Russia the main threat to UK interests. And Russia’s invasion of Ukraine is the main – but not the only – reason forcing an update of the review only 24 months later.

The UK’s commitment to Ukraine is now centre stage and so therefore is its cost, which immediately exposes a prime weakness of this review. An extra £5 billion on defence is more than nothing, as was originally rumoured, but far less than £11 billion which UK defence secretary Ben Wallace argues is needed.

UK military support for Ukraine cost £2.3 billion in the past year and a continuation will use up £2 billion of the new money. The report also notes £3 billion will go on infrastructure for building nuclear submarines at Barrow and nuclear training. That does not leave much for anything else.

There is a pledge to end the reduction of the armed forces which is essential if the UK contribution to Ukraine and European defence is to be credible. But an ambition to spend 2.5 per cent of GDP on defence by an unspecified date is all but meaningless – albeit prudent phrasing given fiscal uncertainties.

China challenge is one of balance

Ministers have been wrestling for months over their choice of language on China, and ‘epoch defining challenge’ is what has emerged, while also expressing concern over China’s links with Russia. But the review is careful to stop short of calling China a threat as Liz Truss intended.

The choice of vocabulary reflects a long desire to balance forging commercial ties with an increasing wariness of data and security threats under President Xi’s leadership of China. The UK wants to support the US in its concerns but not to presume conflict is inescapable.

The review does acknowledge the threat to Taiwan for the first time. Two years ago, it was fiercely criticized for not including any mention of that despite the potential disruption supposedly being ‘far more damaging than the renewed illegal invasion of Ukraine’ as MPs on the Foreign Affairs Select Committee put it.

But again the question of resources is inescapable. The ‘Indo-Pacific tilt’ which the UK declared two years ago is offered not just as a recognition of the region’s political and economic heft in any vision of the future, but as a favour to the US.

The UK lacks the resources to make that tilt credible in terms of substantial support to the US – nor, arguably, would it do the US any favours by neglecting the defence of Europe or the Middle East, which gets scant mention.

The AUKUS announcement on the same day appears to fill that gap. UK prime minister Rishi Sunak was in San Diego, California to greet the declaration that Australia will draw on British designs for its new nuclear submarines – a decision which brings more British jobs and underpins an alliance of both symbolic and practical weight in the region. But for the UK to play its part fully, it may need to divert resources from elsewhere, and this review sidesteps that hard choice.

More broadly, the UK would benefit from considering how to respond to the reality of China’s rise – analysing what happens to supply chains if tension disrupted them and how it might use membership of the Asia-Pacific CPTPP trading bloc, which appears likely to happen soon.

One of the biggest omissions in the 2021 review was relations with Europe and that is somewhat remedied but more is needed. The UK has been a leader for Europe in its clear response to Russia’s invasion of Ukraine – almost the only common thread of passionate agreement between the three UK prime ministers since the invasion – but it should now consider if it wants to take part in joint development of military assets. And a clear statement of cooperation with European Union (EU) governments would be a boost to NATO.

There is also now a Europe-shaped hole in the review’s discussion of trade. The 2021 version mentioned trade 79 times with the focus on new trade agreements outside Europe. It is now clear, if it was not before, these make little difference to GDP. The recent repairing of relations with the EU – and France in particular – may yield more practical results two years from now.

UK power in the world is changing

The review is also largely silent on another difficulty in the UK’s foreign policy which are the aims and size of its development aid – much changed from its original goal of poverty reduction to a focus on national interest with a reduced budget. This is sensitive political territory but must be better spelled out to count as a plan.

The FCDO intends to appoint a second permanent under-secretary to deliver the government’s development priorities and the minister for international development will join the National Security Council. This acknowledges the disruption caused by the merger of the FCO with DFID and the need for development staff to have clear leadership as well as, hopefully soon, a clear policy.

The pledge of a one-off payment of £20 million for the BBC World Service 42 foreign language channels for two years is welcome too as an acknowledgement of their ‘soft power’ value, especially in parts of the world where democracy is absent or in retreat.

European Hub for Contemporary China

The European Hub for Contemporary China is a three-year project focused on original research on China.

The European Hub for Contemporary China (EuroHub4Sino) is a three-year project, which began in October 2023, to produce original research on China. It also seeks to create an online platform that pools a wide array of European knowledge and expertise on contemporary China in one publicly accessible research platform. The project is run by a consortium of eight partners across six European states.

Find out more by visiting the project website.

EuroHub4Sino is co-funded by the European Union. UK participants in Horizon Europe Project European Hub for Contemporary China are supported by UKRI grant numbers 10108183 and 10108749.

China’s economic policy pendulum has swung towards stimulus – but keep expectations low Expert comment jon.wallace 14 October 2024

Beijing historically swings between stimulus and frugality. But Xi Jinping’s ambition for self-reliance will constrain any new efforts to boost the economy.

Policymakers in Beijing have spent the past three weeks trying to convince the world that they are determined to deliver meaningful support to China’s sagging economy. 

Since late September statements have come from the central bank, which promised to cut interest rates, release liquidity, and provide funding to securities firms; from the politburo, which said it wanted to stabilize the real estate market, boost the capital market and shift towards looser fiscal and monetary policy; from the government’s main planning body, which promised a package of policies to support domestic demand; and from the finance minister himself, who at the weekend committed to issue more debt to recapitalize banks, support local governments and aid unhappy consumers.

Though details have been scant, the Chinese stock market has responded enthusiastically to this flurry of rhetoric. But the bigger question for the global economy is whether a boost in Chinese demand can return the country to its former status as a reliable destination for global exports and capital.

With that measure of success in mind, it is worth keeping expectations low. For the past 15 years, Chinese authorities have been wrestling with two conflicting objectives: to grow the economy, and to minimize the risk of financial instability. Those goals sit uneasily with each other because the effort to boost growth has relied on borrowing; and yet a rise in debt can increase the risk of a debt crisis.  

Chinese policymaking has responded to this dilemma by taking on a pendulum-like quality. Sometimes the authorities boost the economy by funding more investment spending. At other times that stimulus gets reined back as policymakers worry about the economy’s indebtedness.

In the aftermath of the great financial crisis of 2008, for example, Beijing’s over-riding priority was to protect the Chinese economy from the risk of recession by implementing a huge credit-financed stimulus to spur investment in infrastructure and real estate. 

By 2012, though, concerns about over-indebtedness began to dominate, and a withdrawal of stimulus saw the Chinese economy sag. In late 2015,a new round of stimulus measures emerged, only to be withdrawn again around 2018.

With that pendulum in mind, the optimistic take on what policymakers have said in recent weeks is that we are now back in stimulus mode. That’s true in part, but three factors suggest that this time is a little different.

Different times

First, China’s rising debt burden increases authorities’ worries about financial stability. Data from the BIS show that China’s private sector debt almost doubled in the past 15 years to 200 per cent of GDP at the end of 2023. The comparable debt stock for the US and the Eurozone was much lower, at 150 per cent each.

Second, ideology is playing a growing role in shaping Chinese economic policy. The most visible effect has been to prioritize Chinese state-owned enterprises, at the expense of the private sector. This became especially visible in 2021 with a campaign against the ‘unrestrained expansion of capital’ – Beijing’s way of expressing its anxiety that China’s corporate sector was behaving in a manner inconsistent with Chinese Communist Party goals. 

Although that phrase is no longer current, entrepreneurs’ animal spirits remain in the doldrums. They are likely to stay there as long as President Xi Jinping’s preference is for ‘bigger, better, stronger’ state-owned enterprises, which use capital much less efficiently than private firms.

Third, today Chinese policy is shaped by Beijing’s perception of geopolitical risks that it faces. Those risks became starkly apparent in February 2022 after Russia’s invasion of Ukraine, when essentially every country that prints a reserve currency joined to freeze Russia’s access to its foreign exchange reserves. That enveloped the Russian economy in a network of sanctions that sharply constrained its access to a whole range of imports.

It is not difficult to consider a similar scenario confronting China. Beijing’s approach to economic policy is therefore heavily influenced by the need to insulate itself from that kind of risk (though Chinese policy had in any case been tilting in this direction for years).

‘Asymmetric decoupling’

This policy can be described as ‘asymmetric decoupling’: a simultaneous effort on the one hand to reduce China’s reliance on the rest of the world by substituting imports with domestic production; and, on the other hand, to increase the rest of the world’s reliance on China by establishing itself as a ‘zhizao qiangguo’, or manufacturing powerhouse.

This is the right context in which to understand a central economic goal of the authorities, which is to reduce the economy’s dependence on real estate investment. 

The intention is to allow capital and credit resources to migrate to new sectors of the economy that will help to build that manufacturing powerhouse: high-tech and green energy, in particular. What that means in practice is that any forthcoming support for the real estate sector will be rather limited.

How Beijing is closing surveillance gaps in the South China Sea The World Today iallan.drupal 15 October 2024

The discovery of a new radar system on China’s Triton Island military base shows that Beijing is rapidly developing its intelligence capacities in contested waters, write John Pollock and Damien Symon.

New satellite images reveal how the Chinese military is dramatically expanding its capabilities on Triton Island, which looks set to become a one of Beijing’s key signal intelligence bases in the South China Sea.

Once completed, the radar system would significantly increase China’s signals intercept and electronic warfare capabilities across the disputed Paracel Islands archipelago and add to a wider surveillance network spanning much of the South China Sea.

The enhanced facility on Triton is likely to offer a challenge to China’s competitors in the region and internationally.

China seized control of the Paracels from Vietnam in a 1974 naval battle, and competition for access to it waters has intensified since the recent discovery of oil and gas reserves. Chinese and Vietnamese maritime militia clashed off the coast of Triton in 2014.

In addition, American, British and Australian naval forces have for the past decade patrolled the waters to collectively challenge China’s contested ‘nine-dash-line’ claim to large stretches of the South China Sea. 

Overlapping anti-stealth network

A year after work was first identified on Triton, satellite images from Maxar have helped build a clearer picture of Beijing’s efforts to defend this strategic waterway.

The most striking development is the construction of a new radar system, known as SIAR – synthetic impulse and aperture radar – which purportedly detects stealth aircraft. The counter-stealth radar on Triton is characterized by its distinctive octagonal structure, which resembles another SIAR system built by China on Subi Reef in the Spratly Islands, south of the Paracels, in 2017. A half-completed tower also sits near the SIAR radar on Triton, which is likely to be the operations centre.

Once completed, the radar on Triton will form what is believed to be a wider network of at least three overlapping counter-stealth radars built across Chinese bases in the South China Sea over the past decade, including on Hainan Island, home to several Chinese naval bases. 

The positioning of the radar on Triton, 320km south of Hainan, is telling, says J. Michael Dahm, Senior Resident Fellow for Aerospace and China Studies at the Mitchell Institute. 

‘SIAR radars cannot see over the curve of the Earth, which means there is a gap in China’s air surveillance coverage between Subi Reef and Hainan Island. The Triton Island site will help close that gap’, said Dahm.

The aim, he suggests, is to give China contiguous counter-stealth radar coverage of the South China Sea.

More construction underway

The satellite images reveal other building projects on Triton. One is a large pad at the end of the road network which will probably be used as a launching point for a mobile anti-ship missile battery. The building at the northeast end of the road is probably a storage building for missile transport vehicles. 

Diminishing Vietnam’s options

The development of a new counter-stealth radar system and other suspected signals intercept structures on Triton represents a notable increase in China’s intelligence capabilities in the Paracels. The Chinese Communist Party has not disclosed the purpose of the building work on Triton, but its effects on regional and global competitors are likely to be wide ranging.

For Vietnam, which is rapidly expanding its own bases in the South China Sea, the intelligence structures on Triton would significantly diminish its capacity to operate undetected in the area. Alongside existing radar on Triton which can detect sea-going vessels, Beijing now has the potential to track Vietnamese air movements and gain forewarning of Hanoi’s manoeuvres in the area, including efforts to access oil and gas deposits.

The desire to strengthen control over these resources may explain why China is fortifying Triton Island, says Bill Hayton, Associate Fellow in the Asia-Pacific Programme, Chatham House. ‘The developments might be a warning that China is planning to mount another drilling expedition’, he suggests.

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A New Era for China: Implications for the Global Mining and Metals Industries 18 June 2018 — 9:00AM TO 10:30AM Anonymous (not verified) 8 June 2018 Chatham House, London

Since the turn of the century, China’s demand for resources has dominated global headlines. It’s rapid demand growth through the early 2000s sparked the beginning of the commodities ‘super cycle’, and encouraged a growing Chinese presence in international mining, and in global metals and minerals markets. More recently, its transition toward the ‘new normal’ of slower but higher quality growth has underpinned the sudden slowdown in global commodities demand.

Drawing on China’s domestic ambitions, as set out in the 19th party congress, and on its wider strategic ambitions through the Belt and Road Initiative, the speaker will set out his thoughts on China’s next era of growth, and its likely implications for international mining investment and global metals and minerals markets.

The Global Implications of China's Energy Revolution 4 March 2019 — 9:00AM TO 10:30AM Anonymous (not verified) 7 February 2019 Chatham House | 10 St James's Square | London | SW1Y 4LE

Ten years ago, it would have been difficult to believe that China – the world’s largest greenhouse gas emitter – would be one of the global leaders in some elements of clean energy development and deployment. With increasing air pollution and predominantly coal-fired power generation fueled by a booming economy and population, China has had to rethink its approach to environmental protection and climate mitigation.

Strong government signalling and national policies have led to the construction of the world’s largest fleets, wind farms and solar photovoltaic arrays in an effort to reduce national GDP intensities of energy and CO2 emissions. How has the availability of large amounts of capital, and the number of state-owned companies with soft budgetary constraints, helped contribute to this?

Against this backdrop, this event will consider how China must re-evaluate its approach to energy security – coal made up the majority of the country’s energy in 2016, followed by oil, of which 65 per cent had to be imported – despite the country being one of the pioneers of renewable energy. This event will look at how, in delivering on its clean energy objectives, China could redefine the traditional energy security paradox and in fact become more resilient to previously overlooked vulnerabilities.

China Paves Its Way in New Areas of International Law Expert comment sysadmin 31 March 2017

China is looking to increase its capacity and influence in international legal matters – and it is particularly in frontier areas of the law that China is likely to take a proactive stance.

Foreign Minister Wang Yi called China a staunch defender and builder of the international rule of law in his speech to the UN General Assembly in October 2014. He promised that as China grew stronger, it would make a greater contribution to the maintenance and promotion of international rule of law, and would work with other countries to build a fairer and more reasonable international political and economic order.

For many in China, that time has now come: there is a sense that China deserves a much stronger and more respected voice in discussions surrounding the future of the international system. The recent speeches of Xi Jinping in Davos and Geneva in January 2017 suggest that China is now seizing the initiative and fighting for a voice and influence commensurate with its status and power as the number two economy in the world.

But there is an interesting divide in the areas in which China chooses to assert itself. In traditional areas of international law – such as the law of the sea and international human rights law – China continues to harbour reservations about the fairness of the existing international order. Its misgivings are fuelled by a perception that it did not play a significant part in the creation of the post-Second World War international order, and that those rules operate mainly in the interests of Western powers.

There is also a sense that traditional areas of international law do not offer a level playing field for China, since Western states have far more experience at operating in those. We know from Chinese experts that in the South China Sea case, one background issue that played into China’s refusal to engage in litigation with the Philippines and other interested states (which were represented by leading Western international lawyers) was a lack of experience before international courts and tribunals.

Contrast this with newer areas of international law– such as the regimes governing cyber, space, climate change and deep sea mining issues. In these areas, the rules are still in the process of being developed and tested, and the influence of the existing powers is not so firmly established or accepted, so there is more opportunity for China’s voice to be heard and heeded.

On climate change, China has become a champion of the Paris Agreement, which it worked hard with the Obama administration to secure. China is also active in some of the processes related to cyber rule-making, both as a member of the UN Group of Governmental Experts on cyber issues and through bilateral dialogues with a number of states. China has taken a keen interest in the regime applicable to the mining of the international seabed, making submissions to the International Tribunal on the Law of the Sea about the procedure for settling disputes. In international economic law, another relatively new area, China has been assiduously cultivating expertise, and is a major player in the negotiation of the ‘mega regional’ trade deal, the Regional Comprehensive Economic Partnership.

In time, the development of China’s much heralded Belt and Road Initiative may provide an opportunity for China to be further involved in international norm-setting, through the creation of a system of economic and political interaction that is built and run more along Chinese determined lines. The emergence of the Asian Infrastructure Investment Bank may offer an early indicator of China’s attempts to shape global governance, although in this context China has so far scrupulously observed international standards and has made no open attempt to challenge them.

So far, China’s practical input to international norm-setting has been limited. While China is prone to making wide-ranging statements of principle, it finds it more challenging to engage in the nitty gritty of specific rule making. But as is clear from its membership of the WTO, China can adapt quickly. While initially it was a reluctant adherent to the WTO dispute settlement mechanism, China is now adept at making active and effective use of its rules to promote China’s interests, including launching a legal challenge regarding the contested issue of its non-market economy status. Overall, there is strong leadership backing for a more activist approach to its engagement with the international legal system.

China sees international law as an important instrument in the “toolbox” of international diplomacy. It will increasingly be seeking to leverage international law to promote its own interests, particularly in newer areas, as it seeks to strengthen its wider soft power and influence.

China, Liu Xiaobo and the New Reality of Human Rights Expert comment sysadmin 18 July 2017

Liu Xiaobo, Chinese Nobel laureate and human rights campaigner, died on 13 July while serving an 11-year prison sentence for ‘subversion’. Steve Tsang tells Jason Naselli that the reaction to Liu’s death reflects the growing confidence of the Chinese government that it can ignore Western criticism.

What does the Communist Party’s handling of the case of Liu Xiaobo tell us about its approach to dissidents and freedom of speech in the Xi era?

What it tells us is the party is tightening control much more than before. The Liu Xiaobo case shows that the party is not comfortable with people asking for the constitution of the People’s Republic of China to be enforced. Charter 08, for which Liu Xiaobo was jailed, ultimately amounts to asking for the rights of Chinese citizens, as articulated in the constitution, to be fully implemented. That resulted in Liu Xiaobo being incarcerated.

But what is really important isn’t so much that the party is tightening its control – that is happening anyway. What is more important is that the party is not that worried about how the Liu Xiaobo case affects international opinion.

If that’s the case, what lessons should countries looking to trade with China but concerned about human rights abuses take from Liu’s case?

We haven’t seen any major Western country come out to strongly and clearly hold the Chinese government to account over Liu Xiaobo’s human rights situation. A few leading governments have asked for Liu Xiaobo’s widow to be allowed to choose to stay or leave China. But so far there is no indication of any government backing that up with anything concrete.

That is very weak support for human rights in China. And it reflects a new reality: of the unwillingness of leading democracies to challenge the Chinese government on human rights matters, and the confidence on the part of the Chinese government to simply ignore what the rest of the world may think about it.

Given that there has been much discussion of China taking a larger global leadership role in the wake of an inward political turn in the US, what are the implications of Liu’s case for China’s global standing?

The implications are really small. There is a stronger expectation and desire to see China playing a global role because Donald Trump has damaged the standing of the United States as a global leader. It is not because of something that the Chinese government has done; it’s because of Trump.

That wider context hasn’t changed. So the Chinese government’s calculation is that the negative international reaction to Liu Xiaobo’s death will blow over in a matter of days – at worst, a couple of weeks – and then things will get back to normal.

There is no serious reason to believe that the Chinese government is wrong in their calculation. At the moment, the major Western countries are focusing on the economic relationship, and doing what they have to do pro forma about human rights issues in China. No major Western government is going to say that they are going to reconsider a major trade deal with China because of how Liu Xiaobo or his family has been treated. The Chinese government knows that and they act accordingly.

Moving on from the international reaction, how does Liu’s situation resonate within China?

Most Chinese don’t even know who Liu Xiaobo is. Within China, you cannot even search Liu Xiaobo’s name, or any permutation of Liu Xiaobo’s name, or the English initials of Liu Xiaobo. Anything potentially about or related to Liu Xiaobo is being censored.

Some things still get through; the ingenuity of a lot of bloggers is infinite. But most Chinese don’t even know what happened to Liu Xiaobo, or if they do, they mostly see him as a shill of the Western world trying to infiltrate and destabilize China.

If Western governments won’t engage China over human rights, what implications does that have for the global treatment of human rights as China becomes a bigger global player?

You can ‘engage’ in the sense of raising the issue with the Chinese authorities, as indeed the UK government and the German government have done, for example. But they haven’t actually taken any concrete steps.

The type of engagement where Western governments would get the Chinese government to demonstrate that something concrete was being done to improve the human rights situation – that era has gone. It is not going to come back in the foreseeable future. And therefore, the situation in terms of human rights in China will not be improving in the foreseeable future.

But what is more significant is how the Chinese government is asserting itself and dealing with domestic and international challenges, including on human rights issues. For many other countries around the world, China is showing an example for how to deal with the West. They don’t see it as being negative; they see it in positive terms.

There are still more countries in the world that abuse human rights than respect human rights. Most of those governments are pleased to see what the Chinese government has done in terms of how it handles the West.

The 2020 Inner Mongolia Language Protests: Wider Meanings for China and the Region 24 November 2020 — 3:00PM TO 4:00PM Anonymous (not verified) 12 November 2020 Online

Speakers discuss the historical roots of the language issue, as well as the wider significance of the protests in China.

Please note this is an online event. Please register on Zoom using the link below to secure your registration.

In September thousands of people protested in Inner Mongolia in opposition to a government move to replace Mongolian language with Standard Mandarin in three school subjects – history, politics and Chinese language.

Announced less than a week before the start of the new school year, the policy also requires schools to use new national textbooks in Chinese, instead of regional textbooks. The mass protests and classroom walk-outs reflect ethnic Mongolian’s anxiety that their native language may be eliminated. What has the government’s response to the protests been?

Independent Thinking: China in Africa, conflicts in 2023 Audio NCapeling 13 January 2023

Episode ten discusses Africa and the complex role China plays on the continent, and how the world should be responding to the major conflicts of 2023.

The first episode of 2023 examines Africa and the complex role China plays on the continent as a new Chatham House report highlights 22 African countries suffering from debt distress with Beijing a key creditor to many of them.

China’s new foreign minister Qin Gang is also touring several African states this week and next, with visits planned to Ethiopia, Angola, Gabon, and the headquarters of the African Union (AU).

This week Chatham House also hosted Dr Comfort Ero, president of the International Crisis Group, to discuss ten conflicts to watch in 2023. The panel examines some of the key conflicts mentioned and how the world is responding to them.

Joining Bronwen Maddox on the podcast this week from Chatham House are Dr Alex Vines, director of the Africa programme, Creon Butler, director of the Global Economy and Finance programme, Dr Yu Jie, senior fellow on the Asia-Pacific programme, and Armida van Rij, research fellow with the International Security programme.

About Independent Thinking

A weekly podcast hosted by Chatham House director Bronwen Maddox, in conversation with leading policymakers, journalists, and Chatham House experts providing insight on the latest international issues.

China-Africa relations Explainer jon.wallace 18 January 2023

What are China’s objectives in Africa, how valid is the concept of ‘debt trap’ diplomacy, and what are China’s military ambitions in the region?

A brief history of China-Africa relations

Africa has been crucial to China’s foreign policy since the end of the Chinese civil war in 1947. China supported several African liberation movements during the Cold War, and for every year since 1950 bar one, the foreign minister of the People’s Republic of China (PRC) has first visited an African country.

China’s new foreign minister Qin Gang visited five African countries and the African Union in January 2023. Wang Yi, the former foreign minister, visited 48 African countries and premier Xi Jinping undertook 10 visits to Africa between 2014 and 2020.

In 1971, the votes of African countries were instrumental in winning the PRC control of China’s seat in the UN General Assembly and Security Council – displacing representatives from Chinese nationalist forces, who had been defeated in the civil war and now governed Taiwan.

In the following decades, China’s focus in Africa switched to eliminating all remaining recognition for Taiwan’s government. Burkina Faso, Malawi, Liberia, Senegal and others all switched their recognition from Taiwan to the PRC. Eswatini is the only African nation still to recognize Taiwan’s government in 2023.

In 1999 China created its ‘Going Out’ strategy, which encouraged Chinese companies to invest beyond China.

The strategy was a statement of China’s growing economic might and created a new wave of Chinese engagement in Africa. It was also an important source of employment for Chinese citizens working on new infrastructure projects.

In November 2003 the first tri-annual Forum for China-Africa Cooperation (FOCAC) summit was held in Beijing. FOCAC was created to improve cooperation between China and African states and signalled China’s growing strategic initiative in Africa.

In 2013, China’s Belt and Road Initiative (BRI) was launched by Xi Jinping, featuring an ambition to reinvigorate the old silk trading route along the East African coast. This should theoretically have seen Chinese investment concentrated in East Africa, but many other African states also sought opportunities through the BRI, making the initiative quickly expand in scope and ambition.

The BRI saw a huge number of signature infrastructure projects built across Asia and Africa, funded by Chinese loans whose size, nature and origin were often opaque. Some African countries became badly exposed to Chinese lending during this period. 

Chinese investment peaked around 2016. Since then, Chinese loans to African governments declined significantly, falling from $28.4 billion in 2016 to $1.9 billion in 2020 – partly due to changing priorities in domestic Chinese politics, and partly due to the apparent difficulty African countries had repaying loans.

China’s investment in Africa

China has taken a position contrary to Western governments in its African investment. It characterizes its loans as mutually beneficial cooperation between developing countries, promising not to interfere in the internal politics of those it loans to.

In this respect it presents itself in contrast to Western countries, who are accused by China and some African governments of arrogant, democratic posturing – often by former colonial powers that looted African resources during the 18th and 19th centuries.

China has learned by doing, and the reality of large-scale investments taught Chinese investors the limits of their approach. For instance, during the South Sudanese civil war, China had to deal with representatives of various forces opposed to the government to maintain the Greater Nile Oil Pipeline, operated by the China National Petroleum Corporation.

China has not made significant efforts to export communist ideology in Africa since the Cold War ended, claiming that Chinese communism could not be replicated outside of China.

However, ideological links exist between the Chinese Communist Party (CCP) and the rulers of a state like Ethiopia, whose Prosperity Party has origins in ‘revolutionary democracy’ and Marxist-Leninism.

China’s National People’s Congress has formal relations with 35 African parliaments and the CCP International Liaison Department (ILD) has relations with 110 political parties in 51 African countries.

Western politicians have increasingly voiced fears that China’s intentions in Africa are predatory, intended to create a network of African states that are obliged to service their debts by offering China access to resources, trade opportunities and locations for military bases.

Debt trap diplomacy

US commentators often describe Chinese policy in Africa as a ‘debt trap’, part of a deliberate strategy to loan unmanageable sums to African countries, draw them into China’s sphere of influence, and force unfair commitments upon them.

Some African nations do have extensive Chinese loans and are suffering from out-of-control debt, exacerbated by the COVID-19 pandemic, the invasion of Ukraine, and high interest rates. But their situations cannot be entirely blamed on Chinese loans. States including Kenya and Zambia have poorly managed their debt to all creditors, not only China.

Meanwhile, other African countries have created realistic, manageable debt arrangements with China without the tremendous risk and uncertainties that characterized some major BRI projects.

China also faces significant problems due to its extensive loans made during the BRI boom period, as it will struggle to force repayment while maintaining its image as a friend of developing nations.

BRI projects were largely uncoordinated and unplanned, with credit offered by competing Chinese lenders. This contradicts the idea of a coherent ‘debt trap’ policy by China.

However, the idea that China may use debt strategically, to expand its influence in the African content and secure access to resources, cannot be completely dismissed. China is an emerging superpower in strategic competition with the US. Building stronger economic relationships in Africa would be a logical step in its aspirations to be a global power.

Sophos X-Ops unveils five-year investigation tracking China-based groups targeting perimeter devices

China's Regions in an Era of Globalization Book sysadmin 14 May 2018

The rise of China has been shaped and driven by its engagement with the global economy. This engagement cannot be understood at the level of national policymaking alone, but requires analysis of the differences in participation in the global economy across China’s regions.

China is a continent-sized economy and society with substantial diversity across its different regions. This book traces the evolution of regional policy in China and its implications in a global context.

Detailed chapters examine the trajectory of what is now becoming known as the Greater Bay Area in southern China, the inland mega-city of Chongqing, and the role of China’s regions in the globally focused Belt and Road Initiative launched by the Chinese government in late 2013.

It will be of interest to practitioners and scholars engaging with contemporary China’s political economy and international relations.

This book is published as part of the Insights series.

Praise for China’s Regions in an Era of Globalization

About the author

Tim Summers works on the political economy and international relations of contemporary China. He is a Lecturer at the Centre for China Studies, The Chinese University of Hong Kong, and a (non-resident) Senior Consulting Fellow on the Asia-Pacific Programme at Chatham House. He was British consul general in Chongqing from 2004 to 2007.

This book is published in collaboration with Routledge.

Purchase

• Worldwide (via Routledge)
• Students (via Browns Books)

How Influential Is China in Zimbabwe? Expert comment sysadmin 20 November 2017

A trip to Beijing by Zimbabwe’s military chief was a ‘normal military exchange’, China’s foreign ministry said after the army seized power in Harare. Alex Vines examines the extent of China’s influence in Zimbabwe.

The news that General Constantino Chiwenga had visited China only a few days before the military takeover in Zimbabwe was a coincidence that did not go unnoticed. There was also speculation after China said it was closely watching developments, but stopped short of condemning President Robert Mugabe’s apparent removal from power.

China is Zimbabwe’s fourth-largest trading partner and its largest source of investment - with stakes worth many billions of pounds in everything from agriculture to construction. Zimbabwe is the dependent partner - with China providing the largest market for its exports and much needed support to its fragile economy.

China’s relations with Zimbabwe are deep, starting during the Rhodesian Bush War. Robert Mugabe failed in 1979 to get Soviet backing, so turned to China, which provided his guerrilla fighters with weapons and training. Both countries formally established diplomatic relations at Zimbabwean independence in 1980 and Mugabe visited Beijing as prime minister the following year. He has been a regular visitor since.

For years, Zimbabwe’s officials have tried to play off China against the West, advocating the country’s ‘Look East’ strategy, particularly following the introduction of EU sanctions in 2002. Indeed, a decade ago, Mugabe told a packed rally at the Chinese-built national sports stadium in Harare: ‘We have turned east, where the sun rises, and given our back to the west, where the sun sets.’

China’s military engagement also deepened during Zimbabwe’s ‘Look East’ era. Significant purchases were made, including Hongdu JL-8 jet aircraft, JF-17 Thunder fighter aircraft, vehicles, radar and weapons. However, following a controversy about a shipment of arms in 2008, Beijing decided to list Zimbabwe for ‘limited level’ military trading.

Despite Zimbabwe’s efforts, the ‘Look East’ strategy did not bring the investment flood hoped for and a decade later, in August 2015, Mugabe openly asked for Western re-engagement in his ‘state of the nation’ address.

Now, the reality is that increasingly Chinese and Western interests - particularly those of the UK - have become aligned. Not far from each other in the outer suburbs of Harare, two of the biggest embassies in Zimbabwe are the British and the Chinese. As other embassies scaled down or closed, Beijing’s expanded. Whereas British diplomats were well connected with business, civil society and opposition figures, the Chinese invested in ‘technical support’ of the party of government Zanu-PF, including state security and the presidency. When it came to Zanu-PF politics and factionalism, Chinese diplomats were well connected and insightful and, like their Western colleagues, concerned about stability, a better investment climate and adherence to the rule of law.

President Xi Jinping visited Zimbabwe in 2015 and President Mugabe visited Beijing in January 2017. In public, the Chinese leader said his country is willing to encourage capable companies to invest in Zimbabwe. But in private, the message was that there would be no more loans until Zimbabwe stabilized its economy.

In 2016 trade between the two countries amounted to $1.1 billion, with China the biggest buyer of Zimbabwean tobacco and also importing cotton and various minerals. In return Zimbabwe imported electronics, clothing and other finished products. Chinese state construction firms have also been active, building infrastructure including Zimbabwe’s $100 million National Defence College. And last year China agreed to finance a new 650-seat parliament in Harare.

But Chinese diplomats and many businesses are waiting for better days in Zimbabwe. Some companies have found the investment climate challenging - being burned on diamonds, for example - and have looked for alternative markets. A couple of weeks ago I was in China, attending a meeting on China-Africa relations and Zimbabwe was not mentioned once. Unlike Ethiopia, Sudan, or Angola that are strategic partners, or big markets like Nigeria, Kenya and South Africa, Zimbabwe is far from being Beijing’s new priority.

So, Beijing’s interest is in a better investment climate in Zimbabwe. A clear transitional arrangement resulting in elections for a legitimate government in Harare is as much in Beijing’s interest as London’s.

The ‘Look East’ and the ‘Re-engagement with the West’ strategies have not brought about the confidence and investment that Zimbabwe needs. What Zimbabwe requires is stable and accountable government - then investors from Asia, America and Europe will seriously consider that Zimbabwe has an investment future. This was the message that Mugabe received in Beijing in January. And the one which Zimbabwe’s military chief also was given last week.

This article was originally published by BBC News.

Chatham House Primer: Inside China’s government 30 November 2022 — 6:00PM TO 6:45PM Anonymous (not verified) 4 October 2022 Chatham House

How are decisions made in Beijing, across China and where does the CCP fit in?

Still little is known in Western circles about the inner workings of China’s government. In power since 1949, the ruling Chinese Communist Party has evolved over decades to its current embodiment under President Xi Jinping.

The need for a better understanding of China’s government has been heightened, particularly as the country navigates post-COVID troubles, global economic downturns, wars in Europe, climate change and heightened tension with the United States.

This Primer has been prepared to pull back the veil on the Chinese government. Key issues to be tackled include:

• What is the decision-making process in China’s government?

• How is the party–government relationship best explained?

• How has the party evolved in recent years with new forms of governance and leadership?

• How has China’s government evolved in recent years, particularly in a globalized environment?

• A description of the central government–province dynamic?

• How are citizens engaged in the political process?

• What are the major centres of power in the Chinese political system?

• Has the COVID-19 pandemic altered attitudes towards and the operation of government?

As with all Chatham House member events, questions from members drive the conversation.