While much of the attention of the western world is fixated on the war between Ukraine and Russia, the Philippines and much of the rest of Asia has considered China to be a most important geopolitical force in this part of the world. It seems that there are two separate forces that are driving China’s foreign policy. On the one hand, Xi Jinping stresses cooperation with its Asian neighbors. However, its most recent actions reveal its new foreign policy of aggressiveness and its intention to be the imperial power in the world.
This Chinese dilemma is evidenced by its continuous push to dominate territories it claims in East Asia. The Philippines, unfortunately, has become a victim of this aggressiveness. In recent months, China has forbidden Filipino fishermen to fish in territories they claim as their own, even in the West Philippine Sea. More recently, as local publications have reported, there are more than 100 Chinese vessels operating in the waters in and around Julian Felipe Reef, which is within the territorial sea of the Philippines.
Recent pronouncements by Xi Jinping have also highlighted this contradiction in Chinese foreign policy. Essentially, China is espousing self-reliance as its new economic credo. But self-reliance is difficult, if not impossible, in this new world of globalization. It should be noted that China cannot abolish globalization since it is itself heavily dependent on foreign trade and, to a certain extent, for investments.
So on the one hand, it is espousing self-reliance to lessen dependence on western liberal democracies. On the other hand, it must continue to fortify its position as the world’s leading exporter because its economy is still heavily dependent on exports. Xi Jinping seems to think that China can continue to rely on foreign trade while still trying to reduce its dependence on western countries. It seems that he is willing to accept globalization but only if it is done on China’s terms.
An example of this is China’s willingness to be involved in economic partnerships like the Regional Comprehensive Economic Partnership (RCEP), a broad trading deal involving 15 Asian countries. While this looks like an Asian-based trading union, it is clearly dominated by China. It accounts for almost a third of global GDP but the reason for this is that it includes China.
According to The Economist, Xi Jinping wants to change China’s place in the world economy. He has two principal economic objectives. He wants to build a commanding position for China in industries that are considered strategic, like technology and energy, so that “no one can thwart China’s economic rise.” In China’s eyes, this will prevent the success of the use of economic sanctions on China. Perhaps, China does not want to be another Iran or Russia, against which the western liberal democracies have used economic sanctions. This is one critical way to maintain its autocratic system from “foreign intervention.”
The second objective is for China to rely less on “potentially hostile western partners for trade and finance and to develop new and better ones closer to home.” Its Belt and Road initiative is one method by which China hopes to develop new economic partners.
While China has had some success in building self-sufficiency in strategic industries, it has had more problems with its second objective, which is finding better trading and investment partners. This second objective is facing difficulty not only because of the globalization trend around the world but also because of the pandemic, which has caused global supply chain shortages.
The current global economic environment has slowed global economic growth and reduced foreign trade in most countries. At the same time, more countries – including major economies like the US and Western Europe – are also looking at self-reliance as a way of coping with these supply chain shortages.
One of China’s principal allies and trading partners is Russia, now involved in a war of attrition with Ukraine. This war and subsequent economic sanctions have considerably weakened the Russian economy and has deprived China of a major trading and finance partner.
Xi Jinping has also attempted to return to socialism in his push for a more self-sufficient economy. This has meant that he has tried to lessen dependence on private enterprise and relied more on government-owned businesses. This push for a self-sufficient economy has resulted in contradictions.
For example, The Economist notes, “The desire to promote the use of the yuan abroad, for example, clashes with efforts to insulate China from global economic swings. The resulting muddle has left China neither much of a force in global finance nor protected from movements in markets beyond its control.”
This attempt to engage in globalization but strictly on its own terms has resulted in China growing more slowly and less predictable. In a world where the global economy is either slowing down or headed for a recession, it needs a stable China which has been the source of growth for the world in the past 20 years.
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