Theme: This ARI reviews China’s new-found world status and its effects on the regional and global balance of power.
Summary: At some point in 2003 or 2004, the world stopped wondering whether China had become a superpower; it openly started treating it like one. It was accepted that the People’s Republic of China was not just a demographic giant with an economy that had posted sustained high growth for 25 years. People could no longer pass over the fact that this growth carried with it international implications. The extraordinary degree to which China’s economy opened up to the outside world and its membership of the World Trade Organisation sped up the country’s integration into the global economy and gave it the planet’s fourth-largest GDP in 2004 (in 2007 it became the third-largest).
But the global impact of China’s rise is not just economic. Around the same time, Beijing engaged in an unprecedented diplomatic activism that demonstrated its decision to wield a greater political influence. From Sudan to Iran and from Latin America to North Korea, China has become a player that can no longer be ignored. This growing political projection is also backed by the improved capabilities of the Chinese military, the aims of which worry both China’s neighbours and the US. Furthermore, in its new international strategy Beijing has not neglected the cultural dimension or the idea of ‘soft power’, displaying a good knowledge of global forces.
Analysis: China’s growing economic, diplomatic, military and cultural influence is attracting the attention of other powers. Governments and analysts all over the world are assessing the scope of the new Chinese power, as well as its effects on the regional and global balance. But this effort at analysis will always be incomplete if it does not look first at the motivations of China’s leaders and the opinions of its strategists (by the way, increasingly diverse in their views) and take into account all the factors that influence Chinese decision-making. In general terms, the context of Chinese foreign policy is defined by: (a) China’s perception of the world and of its own role in the international system; (b) the external elements that shape Chinese diplomacy, in particular its relations with the US and its Asian neighbours; and (c) finally, political, economic and social circumstances within China.
China and the International System
Observers of China’s rise dedicate much of their analysis to discussing whether China is a revisionist power or one that defends the status quo. The verdict on this might have to wait until China fully consolidates its international power, a process which at the current pace it might be close to achieving by mid-century. As of today, both Beijing’s behaviour and the statements of its leaders allow one to think that China does not seek at all to shake up the international system (another issue altogether is whether it prefers a multipolar world). Rather than try to change the international system, China is showing a great skill for using it in a way that responds to its own objectives.
This is without a doubt a major transformation from the days of Mao, and it is a change that took place gradually over the course of the 1990s. In the middle of the decade, even though it faced no direct external threat to its security and had normalised its diplomatic relations with its neighbours, China still saw the outside world as hostile. The Cold War had been over for a couple of years and the US had confirmed its status as the planet’s only superpower. Washington not only sent an aircraft carrier to the Taiwan Strait during the 1996 presidential elections on the island, but also strengthened its alliance with Japan in that same year. Beijing feared the prospect of facing US hostility and being surrounded by Washington’s allies. The need to prevent other countries joining a policy of containing China led to a shift in its foreign policy, a change in which one could discern a new way of interpreting international relations.
China’s leaders were aware that their country’s growing economic power was transforming the international profile of the People’s Republic, while changes in the international system also required a re-evaluation of China’s perception of the world. Three decades of reforms had produced a very different China, at the same time as the collapse of the Soviet Union had transformed the global political balance. Chinese leaders saw themselves obliged to manage the emergence of their country as a great power, and to do so in the context of a transformed international power structure.
The result of this evolution is a China that is developing strategic global interests and therefore has come to depend on the international system. As Jiang Zemin said in his last report as Secretary General of the Communist Party in 2002, the next two decades will provide China with a ‘strategic opportunity’ (zhanlue jiyu) which ‘cannot be missed’. Beijing must concentrate on its economic and military modernisation, avoid unnecessary conflicts and gain international prestige and power. China may feel uncomfortable with the idea of a world order dominated by the US. However, it will not seek to transform it through force: a stable international system is the essential condition for assuring its economic growth and an enhanced diplomatic status. In this way China has learned to use the international system as part of its development strategy: ‘if it rises within the system rather than seeking to transform it, it will not only have greater influence in the future definition of the international system, but rather it is also more likely that China’s emergence will take place peacefully’.
Nothing illustrates this Chinese position better than its support for globalisation. It was the decision of its leaders to open up the economy to world markets in the late 1970s which made it possible for China’s economy to take off. The Asian crisis of the 1990s forced Beijing to reconsider its strategic options once again. The commitment adopted was that of greater integration in the world economy by joining the World Trade Organisation in late 2001, a step which, besides allowing China to participate in the formulation of multilateral trade rules, tipped the internal debate in favour of the reformists. The reformists see globalisation as essential for economic growth, which at the same time is a key factor in maintaining political stability. Meanwhile, economic development enhances the nation’s power and in this way facilitates the Chinese goal of taking on the status of a regional and global power. As far as its external strategy is concerned, China’s integration into the global economy has not only improved its international status, but has also shown it new ways to channel its power.
This Chinese perception of the world is what explains the conceptual transformation of its foreign policy and the evolution of its diplomacy. The shift of the mid-1990s led to the adoption in 1997 of a ‘new security concept’. After coming to believe that the forces of history had swept away the Cold-War mentality, China advocated a strategic arrangement that opposed military alliances and defended mechanisms of cooperation as the best way to guarantee international peace and security.
This concept also explains China’s inclination towards multilateralism, another of the most significant changes in its foreign policy. Until the early 1990s, China was wary of multilateral processes in the belief they would be used as a platform to oppose the giant of the Asian region. But now Beijing sees participating in them as a useful tool for contributing to the formulation of international rules, improving relations with neighbouring countries and limiting what it sees as the excessive global influence of the US. This more receptive attitude towards multilateralism also helps ease other countries’ fears of China posing a threat.
Just two years after the adoption of this concept, China’s strategic thinking took yet another step forward. The war in Kosovo –during which the Chinese Embassy in Belgrade was bombed– alarmed Beijing. It considered that this showed that the US wanted to sidestep the United Nations and resort to the use of force to intervene in the affairs of other countries. China opposed the idea of converting NATO into a global organisation, as well as the humanitarian interventionism advocated by the Clinton Administration. Beijing feared the US could act in the same way on the Chinese periphery: its strategists considered the possibility of a US intervention in North Korea, in the South China Sea or the Taiwan Strait. Above all the war in Kosovo served as a catalyst for China to reconsider the global strategy and intentions of the US.
Since the 11 September 2001, terrorist attacks on the US, China’s ideas on its international role have evolved even further. The wars in Afghanistan and Iraq, and the confirmed US unipolarity –as well as the implications of China’s own economic power and the shifting Asian balance– led Chinese diplomacy to redefine its concept of the world. Coinciding with the coming to power of the so-called fourth generation of leaders in 2002-03, Chinese foreign policy embraced the idea that it was time for China to adopt a ‘great power mentality’ (daguo xintai), but without frightening anyone else.
History has shown that the emergence of new powers often dooms the international order and threatens peace. China wants to break this rule with the adoption of a new idea: the ‘peaceful rise’ (heping jueqi). For Zhen Bijian, who coined this term in 2003, China aspires to ‘grow and progress without altering the existing order’ and ‘in a way that also benefits our neighbours’. In a more official way, the Chinese Prime Minister Wen Jiabao would use the same concept shortly thereafter –although from then on with the wording ‘peaceful development’– and insist: ‘We are determined to assure a peaceful international framework and a stable national environment which allow us to concentrate on our development and, with it, contribute to the peace and development of the world’.
China and the US
After the end of the Cold War, many Chinese specialists thought power in the international system would be divided up: the US, Europe and Japan would dominate the world economy, while the US and Russia would control strategic and nuclear issues. But others thought right then that the US could become the world’s only superpower, with an inclination towards unilateralism that might harm China’s national interests. In the mid-1990s, China concluded that the world was not moving towards the multi-polarity in which it had trusted, but that it was advancing towards new forms of interdependence, especially in Asia.
Beijing’s point of view is based on the idea that, over the long term, the decline of American domination and a transition towards a multi-polar world are inevitable but that over the short term it is unlikely that US power will weaken or that its position as the world’s only superpower will change. Beijing thinks Washington will maintain its pre-eminence for at least two more decades, a period during which the People’s Republic will remain relatively behind in economic, technological, scientific and military terms. Analysis of the Soviet experience, which showed Chinese analysts it was futile to compete strategically with the US, led them to the conclusion that there was no alternative to developing a positive relationship with Washington.
The logic of the Chinese strategy responds therefore to the circumstances of what it expected to be a period of transformation which will last until the end of the US-dominated, post-Cold War, unipolar international arrangement. Some analysts have therefore labelled it a ‘transitional strategy’; in other words, it would be a strategy designed to meet the requirements of a China on the rise and allow it to grow during a period of unipolarity, but not a strategy aimed at guiding China once it has consolidated itself as a power in circumstances that would be very different.
Acknowledging that the US is the world’s only superpower and one of China’s main providers of capital, technology and markets, Beijing cannot afford any hitches in its relations with Washington. The attitude of getting closer to the Bush Administration, observed since 2001, is due in part to the idea that confrontation with the US would jeopardise Chinese interests: Beijing must have close ties with Washington if it wants to succeed in its modernisation efforts. A clash would not only endanger the stability that China needs in order to develop, but would also hurt Asia as a whole and force the nations of the continent to choose between the US and China, an option these countries want to avoid at all cost.
Chinese strategists thus reached the conclusion that so long as the US did not affect China’s vital interests, Beijing could live with a ‘hegemonic power’. Although China is worried by the potentially hostile goals of the US presence in the Pacific and of its alliances, it still acknowledges that this presence exerts a positive influence in terms of stability. Consider, for instance, the possibility of a conflict on the Korean peninsula or the prospect of a more independent Japanese security policy. China is also aware that the US security umbrella also calms the states of region with regard to their own relations with Beijing.
Over the long term, however, the evolution of their relations will continue to be marked by mutual mistrust. Many in the US believe that China’s rapid economic growth and its growing political influence on the world stage present new challenges to American interests. China, meanwhile, suspects that Washington is trying to thwart its attempts to become a new superpower. This mistrust is dangerous as it creates the risk of misunderstandings that could trigger open rivalry. It is probably inevitable for each to be wary of the other’s future capabilities and intentions. The big question is whether the two countries will be able to handle that competition without endangering the stability of eastern Asia.
China and Asia
China’s ambitions stem from an acknowledgment of its own limitations: despite the expectations it triggers, the People’s Republic is still far from the wealth level of developed countries, nor does it have the military capacity of a superpower. At the same time, the fluidity of the international context and the state of transition of its political system favours the search for an indirect way for China to develop its influence. To this end China has replaced a classical political-military strategy with a diplomatic and economic focus that gears the Asian scenario in its favour.
Beijing has thus developed a new approach to economic cooperation and regional security in Asia. The strategists of the People’s Republic have accepted the idea that China’s rise must go hand in hand with Asia’s rise; in this way, the resulting change in the global balance of power will put Beijing in a better international position. By adding ‘Asia’, China has a key tool for overcoming its limitations as a power. Beijing has thus been able to articulate the strategy that best serves its interests over the long term: if China aspires to achieve a strategic balance with the US, it knows it can do this only through its relations with other Asian states.
One of the most efficient ways to do this is to increase its economic exchanges with the countries on its periphery. But a prior condition is to maintain regional peace and ease concerns over the consequences of growing Chinese power. Beijing takes part in more than 40 Asian regional forums and, breaking with a tradition of passive diplomacy, has taken on a prominent role in the North Korean nuclear crisis; it has even mediated in a complex dispute between Cambodia and Thailand. This good neighbour policy is an application of the new security concept: the stability of the regional setting is an essential pre-requisite for China’s rise. Meanwhile the ‘peaceful rise’ serves as the conceptual framework for a network of influence that Chinese leaders are weaving throughout the region.
In South-East Asia, China proposed to ASEAN the creation of a free-trade area and in 2003 became the first non-member state to sign the organisation’s friendship and cooperation treaty. In central Asia, China has been the main force behind the Shanghai Cooperation Organisation, founded in 2001 and based in Beijing. In southern Asia, China has made a considerable diplomatic effort to strengthen its economic, military, and political relations with its old rival and fellow aspirant to superpower status –India– while maintaining its traditional friendship with Pakistan. In north-east Asia, as mentioned earlier, China has shown great activism in the North Korean nuclear problem and become a driving force for regional cooperation.
Economically and diplomatically, China is weaving a web of interdependence that is managing to shift the regional balance in its favour, to the detriment of the US position.
In summary, China’s vision of Asia and the world yield these three broad objectives for Chinese strategy: (1) maintaining a peaceful periphery in order to concentrate on economic growth and domestic reforms; (2) managing wealth and power by calming its neighbours, in other words easing the perception of China as a threat; and (3) handling the moves of the US on its periphery without confronting Washington directly.
The Domestic Context
These goals underscore the importance of domestic factors in the formulation of Chinese foreign policy. As we have noted, maintaining economic growth and social stability is essential for China to be able to address its problems, for the Communist Party to maintain its monopoly on political power and for the country to acquire greater power as a nation. In order to enhance its international influence, China needs a modern economy and this economy in turn needs free access to trade and foreign investment. To sum up, Chinese strategy must serve the central objective of development, so the idea is for China to assure itself an economic, political and security environment that allows it to concentrate on its domestic evolution.
Although combining political stability and economic growth has been the goal of China’s reforms since 1978, China faces new challenges, such as rising unemployment, both in the countryside and the cities (a result of the privatisation of state-owned companies), or people’s limited access to basic public services such as healthcare and education. The perception of inequality is at the root of a rise in protests and demonstrations in recent years –a reflection of social conflict that worries the government–.
China’s leaders want to replace a development model based on exports and foreign investment with one that assigns a greater role to domestic consumption. But the problem goes beyond having one or another economic structure: the social cost of growth has become more visible and also harder to manage. Aware that growing differences within Chinese society endanger the Party’s legitimacy, its leaders have questioned the strategy employed so far and adopted a new doctrine (the creation of a ‘harmonious society’ or hexie shehui) that corrects the costs of unbridled growth.
The country’s leaders are conscious of social inequities and know that the basis of their own legitimacy depends on their ability to resolve these problems; this explains why they have responded to the pressure to re-orient China’s development. If China does not improve its capacity for governability, its economic boom could come to halt, and this would affect its international position. Therefore, the internal context is probably the dimension that will most influence the course of Chinese foreign policy in the coming decades.
Conclusion: China that is developing strategic global interests and therefore has come to depend on the international system. Beijing must concentrate on its economic and military modernisation, avoid unnecessary conflicts and gain international prestige and power. China may feel uncomfortable with the idea of a world order dominated by the US. However, it will not seek to transform it through force: a stable international system is the essential condition for assuring its economic growth and an enhanced diplomatic status.
Director of Casa Asia in Madrid
 The book that probably best explains the ‘sudden’ acknowledgement of this impact is by James Kynge, China Shakes the World: The Rise of a Hungry Nation, Weidenfeld & Nicolson, London, 2006.
 On the different elements of Chinese power, see David M. Lampton, ‘The Faces of Chinese Power’, Foreign Affairs, vol. 86, nr 1, January-February 2007, p. 115-127. The wielding of soft power by the People’s Republic is examined in a recent book by Joshua Kurlantzick, Charm Offensive: How China’s Soft Power is Transforming the World, Yale University Press, New Haven, 2007.
 For a summary of the arguments, see Alastair Iain Johnston, ‘Is China a Status Quo Power?’, International Security, vol. 27, nr 4, Spring 2003, p. 5-56.
 Zheng Bijian, ‘China’s ‘Peaceful Rise’ to Great-power Status’, Foreign Affairs, vol. 84, nr 5, September-October 2005, p. 18-24.
 Fernando Delage, ‘Chinese Foreign Policy in the Globalization Era’, Revista CIDOB d’Afers Internacionals, nr 63, September-October 2003, p. 67-81.
 Wang Jisi, ‘China’s Search for Stability with America’, Foreign Affairs, vol. 84, nr 5, September-October 2005, p. 38-41.
 Avery Goldstein, Rising to the Challenge: China’s Grand Strategy and International Security, Stanford University Press, Stanford, 2005, p. 38.
 Fernando Delage, ‘Cooperation and Conflict: The Dilemmas of Security in Asia’, in Max Spoor & Sean Golden (Eds.), Asia in Development: Scenarios of Risks and Opportunities, Fundación CIDOB, Barcelona, to be published soon.
 Fernando Delage, ‘China and the Future of Asia’, Política Exterior, nr 102, November-December 2004, p. 153-166.
 For a more sceptical position on the relative loss of position by the US, see Robert Sutter, China’s Rise: Implications for US Leadership in Asia, East-West Center, Washington, 2006.
 Bates Gill, Rising Star: China’s New Security Diplomacy, Brookings Institution Press, Washington, 2007, p. 10. Also see Zhang Yunling & Tang Shiping, ‘China’s Regional Strategy’, in David Shambaugh (Ed.), Powershift. China and Asia’s New Dynamics, University of California Press, Berkeley, 2005, p. 48-68.
 The first book that examines in detail the influence of current domestic circumstances on Chinese diplomacy is by Susan L. Shirk, China: Fragile Superpower. How China’s Internal Politics could Derail its Peaceful Rise, Oxford University Press, New York, 2007.