March, 2019
China: Planning for dominance
President Xi Jinping is driving a multi-dimensional strategy to lift China to global dominance. This strategy integrates aggressive diplomacy, asymmetrical economic agreements, technological innovation, as well as escalating military expenditures. Much of the architecture for Chinese ascendency is already in place; other elements are emerging. China’s rise reinforces the domestic rule of the Chinese Communist Party (CCP), and in the country’s leaders’ eyes restores China to its historic status as the Middle Kingdom.
Under former leader Deng Xiaoping, China developed an authoritarian capitalist economic model which generated a sustained level of high GDP growth. The economy was dynamic, but also marred by flawed credit institutions, suboptimal state-owned enterprises, and a high vulnerability to corruption. These internal weaknesses are the subject of continuing reform efforts. The anti-corruption campaign has been a special focus for Xi Jinping and an element of his increased personal control of the CCP.
The artful partner
China has implemented external trade strategies to drive economic performance.
- The country’s market potential and its low-cost but skilled labour force have lured companies in advanced economies to invest in China. Once committed to China, companies have been compelled to enter into joint ventures with Chinese partners. Many find that they have lost control of the company, and their intellectual property, and have been displaced by that partner from markets inside and outside China.
- China has used its tremendous potential as an import market to negotiate asymmetrical trade arrangements with developed countries. It insists on investment rights in the partner country that are not available for that partner in China.
- For developing countries, Beijing has designed and financed the Belt and Road Initiative, situating China at the centre of six economic corridors, pulling in raw materials and exporting manufactured goods. The BRI has channelled China’s wealth into the construction of roads, railways, ports and fibre optic networks, ultimately incorporating countries containing two-thirds of the global population.
- China has established the Cross-Border Interbank Payment System to promote its currency, the renminbi, and decrease the dominance of the US dollar in international commercial exchanges.
The interfering partner
Trading partners have quickly found that China uses its commercial status and influence networks to advance regime goals.
- Whether a Chinese partner company is a state-owned enterprise or a private one, it will have close and increasingly explicit ties to the CCP.
- Unless trade agreements are carefully vetted for national security implications, Beijing will use its commercial position to gain access to businesses, technologies and infrastructure that can be exploited for intelligence objectives, or to potentially compromise a partner’s security.
- China is prepared to use threats and enticements to bring business and political elites to its side, and motivate them to defend the Chinese perspective on disputes such as the status of Taiwan and the South China Sea.
- Beijing works actively to influence ethnic Chinese groups, Chinese students and ethnic Chinese businesses in other countries, often curtailing their freedom of expression to promote a narrative favourable to its views. It has also often purchased control of local Chinese-language news outlets.
- Academics and reporters who question Chinese activities are harassed by Chinese diplomats and Chinese-controlled media.
Reinforcing Party rule
Pressure on trading partners to refrain from criticism of China is matched by an intensive effort within China to reinforce the control of the CCP.
- Government structures in China are subordinate to the Party. Government officials are often isolated in departmental silos, and have less knowledge of overall direction than the cadres of the CCP.
- Government data collection within the country is extensive and invasive. It constitutes a low-cost tool for asserting social control over the population through detailed knowledge of collective and individual activities.
- The increasing availability of detailed data from overseas economic interactions means China is also knowledgeable about individuals entering China; its plans to establish data centres and servers in BRI countries will give the CCP further influence.
- China’s new intelligence law specifies that it is the duty of all Chinese citizens to uphold the rule of the CCP, and to volunteer information on anything which may threaten that rule.
- Chinese citizens have some access to international Internet sites, but the government has been successful in denying them information on contentious events.
- The CCP still has strong legitimacy in China, but interest in Marxist theory and attendance at study sessions seem to decline with an individual’s rising economic status. Business elite interest is mixed and pragmatic, while peasants appear largely indifferent to official ideology.
China and the international order
China’s economic influence is reflected in its foreign policy and defence initiatives. It is persistent in disputing the global rules put in place by powers it perceives as in decline.
- China is both a trading partner of the United States and a strategic rival. Beijing does not seek at present to displace Washington in the role of global police, but watches attentively as an overstretched US struggles to maintain its influence.
- China’s military has increased steadily in size and capability. It regularly contributes to peace-keeping missions, but it does so more to acquire operational experience than to achieve humanitarian objectives. It also needs further professionalisation, better-educated soldiers, and stronger leadership.
- China’s military is investing significantly in technology, innovating to rival the US in the military application of artificial intelligence, unmanned weapons systems, quantum computing, and directed-energy weapons.
Outlook
China has already made substantial progress in re-ordering global supply chains. It has recognised the weaknesses in its domestic economic base and appears determined to remedy them. Xi Jinping has increased the reach of the CCP over the lives of citizens, and is targeting the Chinese diaspora as a means of increasing international influence. Diminished contact between Chinese citizens and foreign researchers has rendered the intricacies of Chinese politics even more opaque.
China’s growing influence is a delicate puzzle for the international community, which must welcome a transformed power without acquiescing in the destruction of the global diplomatic infrastructure. China’s aggressive diplomacy and insistence on asymmetrical trade are particularly challenging for countries like Canada which seek mutually positive trade relationships.
Beijing still faces considerable hurdles. With the abolition of the two-term limit on the presidency, Xi Jinping will guide China for the foreseeable future. Authoritarian rule facilitates determined action, but this can translate into decreased sensitivity to criticism, vulnerability to corruption, and a restricted flow of information vital to sound decision-making. The inter-mingling of private and public economic enterprises has led to inefficiency and corruption that persist. One of many fluctuating variables defining the new global system, China’s continued rise is not inevitable and may yet elicit international action both to contain and accommodate its ambitions. For now, its dominance strategy appears relentless and irresistible.
Expanding regional ambitions: The Belt and Road Initiative
China’s Belt and Road Initiative (BRI) is a comprehensive plan to build land and maritime infrastructure projects that will put China at the centre of international trade. The resulting system encompasses six trade corridors, and includes port facilities, highways, railways, pipelines and fibre optic networks. The initiatives will draw in the raw resources China needs and facilitate access to markets for its products. As with other financial and technological initiatives, the BRI is intended to strengthen China’s position as a great power.
The rise of the People’s Republic of China (PRC) is one of the most important issues of our time. As China becomes more developed and prosperous, it is in a position to engage more systematically on the global stage. But what kind of international role, exactly, do its leaders envisage for the country? For a long time, the Chinese leadership has been following Deng Xiaoping’s advice that, in international affairs, China should “keep a low profile, hide our capabilities and bide our time”. But this has clearly changed since Xi Jinping came to power in late 2012. Just a few days after he was appointed as the new leader of the Chinese Communist Party (CCP), Xi publicly announced the goal his country would pursue: by 2049, the CCP would achieve “the China Dream of the great rejuvenation the Chinese nation”, in other words reclaim its historical position as the central power in the region and beyond.
With Xi Jinping at the helm, the Chinese regime has laid out a series of domestic and foreign policies that are meant to help attain this objective. The Belt and Road Initiative (BRI) is the cornerstone of what Xi Jinping has hailed as the “project of the century12 ”. Since the 19th Party Congress (October 2017), BRI has been enshrined in the charter of the CCP, along with ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’, highlighting the regime’s long-term commitment to its success.
In a recent statement before the Senate Armed Services Committee, Henry Kissinger defined BRI as China’s “quest to shift the world’s centre of gravity13 ”, implicitly acknowledging that China wants that centre to shift away from the Pacific and the Transatlantic towards Asia and itself. A careful reading of BRI gives us a glimpse at Beijing’s ambitions to reshape the world order.
Promises and projects
The Belt and Road Initiative was not announced at a single point in time, but instead through two separate speeches given by Xi Jinping. The first was delivered in Kazakhstan in September 2013, when the Chinese president announced that China was willing to create a “Silk Road Economic Belt” stretching across land from China to Europe. The second was given in Indonesia a month later, where he announced China’s intention to launch its equivalent at sea, the “21st Century Maritime Silk Road”. Both proposals rapidly got combined under the abbreviation 一带一路 (yidai yilu) or “One Belt, One Road”, an English translation officially replaced in 2015 by “Belt and Road Initiative” in order to convey the impression that China was offering the concept to the rest of the world, too.
The continental and maritime silk roads take shape along two lines shown on a map published by China’s news agency Xinhua14 . One winds across the Eurasian continent, from Xi’an to Western Europe via Central Asia, South Asia, the Middle-East, Russia, and Central Europe; the other travels along the South China Sea, the Bay of Bengal, the Indian ocean, through the Red Sea up to the Mediterranean. Laid flat across the continent, BRI covers a vast Eurasian region that includes mostly developing and emerging countries representing two-thirds of the world’s population and half of the current global GDP. In Beijing’s vision, the region will be connected to China along six so-called economic corridors that form a star-shaped, or “hub-and-spoke”, system. Over the past few years, in addition to Eurasia, China has included Latin America, Africa and the Arctic into BRI. There is also a digital Silk Road, and a Silk Road in outer space.
BRI’s main feature is a series of infrastructure projects, some of them new, others launched before 2013 but now included within BRI and extending across the continental and maritime domain (railways, highways, pipelines, port facilities and fiber-optic networks). These projects are backed by promises of Chinese investments up to USD 1 trillion, mostly supported by Chinese policy banks (China Development Bank, Eximbank) and by financial mechanisms specifically created by Beijing (Asian Infrastructure Investment Bank, Silk Road Fund). Officially, BRI aims at enhancing China’s relations with the broader Eurasian region through five categories of measures: policy coordination, infrastructure building, increased trade, financial integration and people-to-people exchanges. Thanks to the deepening links in those five areas, there will eventually emerge a peaceful and prosperous “community, a community of shared interests, destiny and responsibility15 ”. In the mind of its architects, BRI is just a means: the ultimate goal is the creation of an integrated region, with China at its centre.
The official narrative around BRI is carefully crafted around references to the historical Silk Road. An inelegant as BRI might sound, the initiative could not be called New Silk Road because it was the name of a 2011 US-led initiative for Afghanistan16 . Nor could it have been called Connecting Asia 2050, because the historical symbol would have been lost. The reference to the ancient silk roads is significant: it refers to an era of wealth, prosperity and peaceful exchanges, a period of time when China was at the apex of its material and civilisational power, and its influence radiated far beyond the confines of its own empire. This is the glorious past that Xi Jinping is promising to bring back when he speaks of fulfilling the China Dream.
Beyond the propaganda campaign
China has been leading an intense, high-level round of diplomatic engagement with the broader region, and indeed the world, to gain support for its initiative. It launched an exceptionally active propaganda campaign to explain to worldwide audiences that its motives are benevolent. A large number of international conferences and seminars for academics and business types, sponsored by Chinese state entities, have been organised both in China and abroad. At the same time, Chinese state media has produced vast quantities of newspaper articles, reports and documentaries, relayed around the globe in several foreign languages. Beyond the propaganda campaign, the sleek videos and the polished diplomatic narrative, which project an image of “win-win cooperation” and goodwill for the broader region’s economic development, China’s real objectives are two-fold.
First, BRI is meant to enhance China’s own economic power by opening new markets for Chinese state-owned enterprises and broadening their global footprint. Subsidies and state support will help the state conglomerates in their race to become national champions capable of competing at a global level. Penetrating new markets will also help to get rid of some of China’s excess industrial capacity (in steel, cement, glass). The Chinese government also intends to accelerate the internationalisation of its currency, the renminbi, through swap agreements, e-commerce and cross-border transactions conducted in Chinese currency.
Second, BRI is also meant to reduce China’s most pressing strategic vulnerabilities. Beijing believes that economic development is key both to reducing the risk of social unrest and political instability, and to discouraging religious radicalisation, fundamentalism and terrorist recruitment within China’s borders and beyond. BRI is also seen as a way to enhance China’s energy security, by partially redrawing the map of its energy supply routes and bypassing the Strait of Malacca.
China intends to use its economic power as an instrument to achieve broader strategic objectives. Instead of gunboat diplomacy and coercive military power, BRI will be used to access new markets, control critical infrastructure assets, and bend other countries’ will to China’s. Economic leverage can be used both as an incentive to garner support for Beijing’s interests and reduce potential resistance, and as a coercive means to punish recalcitrant countries.
As importantly, BRI reflects Beijing’s vision for a new world order. The leadership has recently become more blatant in its denunciation of the current order, criticising it as unfair and biased against emerging powers. The PRC has had to live in a world dominated by the West, universal values threaten to corrode its political system, and alliances undermine its interests. But it now feels strong and confident enough to reshape the international order in ways that legitimise its own political system and create more strategic advantages for itself. China’s own model is now offered as a “new option for other countries and nations who want to speed up their development while preserving their independence17 ”. The “community of shared future for humankind” promoted by Xi Jinping as part of BRI’s vision is supposed to emerge out of a vast area where Western influence is limited and democratic practices are weak. Increased Chinese influence over this region could bolster those who are already authoritarian and corrupt those who are trying to democratise. Advanced democracies would not be immune: their thirst for market access could make them more pliant and less prone to resist or criticise China.
After the end of the Cold War, several Western countries tried to promote infrastructure connectivity and economic development in the hope that prosperity would transform post-Communist Eurasia into a democratised and peaceful region. In parallel with transportation networks, they promoted free trade, democracy and rules-based governance. Those liberal democratic ideals that the West has been trying to promote over the region were part of their shared post-Cold War vision of an “open and free” Eurasian continent. They will likely come under increasing threat as BRI’s footprint spreads across this vast region—with China at the centre—and as Beijing fulfils its dream of the great rejuvenation of the nation.
Looking ahead
As China’s power expands, it will inevitably have an impact on its neighbourhood, the broader region, and possibly the world. Obstacles and challenges will undoubtedly emerge and there is no absolute certainty that China will have the capacity to accomplish its dream as it envisions it. Yet, intentionally or not, BRI will bring changes to the region’s security landscape and have consequences for the strategic planning of Western advanced industrial democracies. Several areas need to be closely monitored:
- What is BRI’s impact on global supply chains? Are there particular industrial or technological sectors that could be affected? Which industrial standards might be affected by the increased clout of Chinese national champions?
- What is BRI’s potential impact on global energy flows? How might the rest of the world’s energy security be affected?
- How consequential will the financial repercussions and debt burden be on weaker countries that may not be able to reimburse Chinese loans? What other forms of compensation might China seek in exchange for its capital (control over national assets or land, critical infrastructure, energy commodities)?
- What does the 21st Century Maritime Silk Road mean in terms of global maritime security, access to the global commons, and extension of the People’s Liberation Army’s (PLA) power projection capacity?
- What are the implications of the development of a Digital Silk Road and of Silk Road data stations set up in Belt and Road countries by Chinese ITC companies? How could this network be used as the basis to duplicate a Great Firewall or extend a social control system outside of China?
- What does a ‘Silk Road in outer space’ look like in terms of Beidou satellite coverage? How can this affect the West’s own intelligence, surveillance, target acquisition and reconnaissance (ISR) capabilities?
- Which countries are the most susceptible to be targeted for enhanced people-to-people exchanges? What kind of student profiles will receive Belt and Road scholarships to study in China? Which countries are enhancing their political and security intelligence cooperation with China under the Belt and Road umbrella? How does BRI help Beijing’s political warfare and influence operations?
Conclusions
Under Xi Jinping’s leadership, China has been more actively trying to re-order the broader region to its advantage. The Belt and Road Initiative is the main instrument serving this ambition. It purports to use China’s economic clout and capital export as leverage to shape regional decision-making towards wider acquiescence to its core interests and support for its geostrategic objectives. When Xi welcomes his neighbours to get “onboard China’s fast train of development18 ”, he is in effect inviting them to bandwagon and align politically with Beijing’s national interests.
More important than BRI’s actual concrete physical progress, such as railways laid on the ground or tonnes of steel exported to emerging markets, the Chinese-led initiative has helped create a momentum that portrays the PRC as the front-runner in efforts to alleviate economic difficulties faced by the global South. Beijing’s apparent dedication in its political, diplomatic and financial commitment to such a complex and conflicted region strengthens its image as a genuine global power. The multi-layered web of political, economic and security ties that Beijing is weaving via BRI with two-thirds of the world’s population is laying the ground of tomorrow’s Eurasian economic and geopolitical landscape in ways that will be dramatically different from the one Western powers have been trying to encourage since the end of the Cold War.
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