Beijing is waging an economics-focused diplomacy of reassurance to counter the
"China Threat" theory and to augment its political clout particularly in the
Asia-Pacific and European regions.
In the last two years of its term of office, the President Hu Jintao leadership
is expected to use the country's economic muscle to convince the global
community that the quasi-superpower's precipitous rise will bring about win-win
scenarios, particularly on the business and trade fronts. This is in view of
foreign-policy setbacks that China has suffered in the past 10 months due
mainly to heightened territorial disputes with countries including Japan and
India, as well as members of the Association of Southeast Asian Nations
Friction between China and its neighbors has apparently allowed
the administration of US President Barack Obama, which has reiterated America's
desire to "come back to Asia", to make new headway in what Beijing perceives as
an "anti-China containment policy".
In the past month or so, senior Chinese diplomats and commentators have cited a
new foreign-policy dictum coined by President Hu, who heads the Chinese
Communist Party's (CCP) policy-setting Leading Group on Foreign Affairs. The
instruction - "insist upon hiding one's capacities and biding one's time;
enthusiastically seek [concrete] achievements" - is an amplification of the
eight-character mantra laid down by late patriarch Deng Xiaoping in the early
1990s: taoguangyanghui, yousuozuowei ("Hide one's capacities and bide
one's time; seek [concrete] achievements"). Hu's motto was first unveiled in a
closed-door conference of overseas-based diplomats held in Beijing in mid-2009.
By adding the qualifier "insist upon", the Hu leadership wants to impress upon
the global community - particularly China's nervous neighbors - that China does
not harbor expansionist tendencies despite the leaps-and-bounds growth in its
economic and military might. By underscoring the fact that China should
"enthusiastically" go after diplomatic achievements, Hu has given solid
indications that the Middle Kingdom would be proactively pursuing objectives
that befit the country's elevated status.
Yet, Beijing also took pains to point out that these ambitious goals are mostly
economic in nature. As the official Outlook Weekly pointed out in a commentary
this month, China is pursuing "economics-focused diplomacy" by ensuring that
"political maneuvers will be in the service of economic goals" and vice versa.
In light of the country's US$2.5 trillion foreign-exchange reserves, Beijing
has an unprecedentedly large war chest to engage in economic diplomacy.
This shift in Chinese diplomacy is evidenced by the marathon overseas forays
made by Politburo Standing Committee (PBSC) members after the plenary session
of the CCP Central Committee last October, which settled the succession
question by inducting Vice-President Xi Jinping into the Central Military
Commission as vice chairman.
The overseas missions have included Hu's trips this month to France and
Portugal, in addition to his attendance of the just-completed Group of 20
meeting in Seoul and the Asia-Pacific Economic Cooperation (APEC) forum in
Yokohama, Japan. Also this month, the chairman of the National People's
Congress (NPC), Wu Bangguo, visited Cambodia, Thailand and Indonesia, while his
PBSC colleague, Chinese People's Political Consultative Conference chairman Jia
Qinglin, toured Syria, Poland, Oman and Kazakhstan. Meanwhile, Vice-President
Xi has set off on a tour of Singapore, South Africa, Angola and Botswana.
Most eye-catching have been inroads that Beijing has made in Europe. For
reasons including fostering a "multi-polar world order", it has been a
long-standing tradition for Beijing to bolster ties with the European Union
when it is encountering hiccups in relations with the United States. Beijing
seems to be reviving the old game of playing favorites, which is a time-honored
tactic to help stymie the development of a transatlantic approach to China.
Hu firmed up a "new-era comprehensive strategic partnership" with France in his
three-day trip to the country, during which he met with counterpart Nicholas
Sarkozy five times. The two leaders signed trade and investment deals worth
$22.8 billion. Sarkozy, who two years ago was pilloried by Beijing for meeting
the Dalai Lama, spoke glowingly of the PRC's global contributions.
"To resolve the big problems in the world we need China," he said. "China
should not be seen as a risk but an opportunity ... It's not by reproaching
people for things that you make progress."
Also this month, China played host to British Prime Minister David Cameron, who
was making his first trip to Beijing and with a record number of business
executives. While the British signed deals worth a mere $1.6 billion, selected
British financial institutions were given access to the China market ahead of
their American competitors. While both Sarkozy and Cameron discreetly touched
upon human rights in private talks with Chinese leaders, no strong public calls
were made for Beijing to improve its treatment of dissidents, including the
incarcerated Nobel Peace Prize laureate, Liu Xiaobo.
While Portugal is not considered a heavyweight EU member, Hu's trip to the
country is emblematic of the quasi-superpower's role in taking advantage of the
situation and shoring up the recovery of European countries that are still
reeling from the international financial crisis.
"We are ready to back, through concrete measures, Portugal's efforts to face
the impact caused by the international financial crisis and broaden our
economic and trade cooperation," Hu said while meeting Portuguese Prime
Minister Jose Socrates.
The two signed deals and contracts in infrastructure, renewable energy and
tourism worth $1 billion. Socrates, whose government is struggling with debts
and weak exports, highlighted the two countries' "excellent political ties" and
vowed to give "priority" to bolstering a Portuguese-Chinese partnership.
Earlier, Beijing bought $600 million worth of government debt issued by Spain,
another weak link in the Eurozone economy. While in Greece last month, Premier
Wen Jiabao pledged to purchase substantial amounts of the financially
beleaguered country's bonds in addition to setting up a $5 billion fund to help
Greek shipping companies buy made-in-China vessels.
Beijing has also used economics-based diplomacy to try to steal the thunder of
President Obama's just-ended Asian expedition, which is interpreted by Chinese
commentators as an effort to expand Washington's "encirclement policy" against
China. For example, NPC chief Wu Bangguo toured Jakarta just prior to Obama's
historic visit to Indonesia, where he spent four years of his childhood. While
the US president made headlines with rhetoric such as "prosperity without
freedom is just another form of poverty", Wu seemed to be able to offer
Indonesians something more tangible - the top parliamentarian pledged to invest
$6.6 billion in much-needed infrastructure projects in the relatively poor
Chinese Vice-Foreign Minister Zhang Zijun pointed out that his country had
"long experience in infrastructure development, and now we have the budget as
well as the technology". China's trade this year with the largest member of the
Association of Southeast Asian Nations is worth an estimated $22.5 billion,
compared with America's $15.6 billion.
Given China's still-festering border problems with India, Beijing would be hard
put to prevent Obama from consolidating America's newly minted strategic
partnership with New Delhi during his 68-hour stay in the 0world's most
populous democratic country. Yet Premier Wen is due to call on New Delhi next
month, when the Chinese leader is expected to stress growing trade and
investment links between the two Asian giants.
There is also evidence that the Hu leadership's new-found diplomatic
flexibility is being applied to Japan. Sino-Japanese ties dipped to the lowest
level in recent memory after the captain of a Chinese fishing vessel was seized
by Japanese coast guard close to the disputed Senkaku Islands (known in China
as the Diaoyu Islands). While in Yokohama for the APEC forum, Hu squeezed in a
20-minute meeting with Japanese Prime Minister Naoto Kan. This was the first
dialogue between the two countries' leaders since the sovereignty row. The
official Xinhua News Agency's report of the Hu-Kan meeting made no mention of
the territorial squabbles. It quoted Hu as putting emphasis on reviving the two
neighbors' "strategic relationship of mutual benefit".
"China and Japan being major partners in economic and trade cooperation, both
sides should continue to deepen their mutually beneficial bilateral
cooperation," Hu said.
The Chinese leadership's "economic-focused diplomacy" seems to have worked to
some extent at the Group of 20 (G-20) and APEC meetings, when Hu and his aides
were able to prevent Obama from targeting Beijing's apparent undervaluation of
the yuan. While the G-20 communique urged members to "move toward more
market-determined exchange rate systems and enhance exchange rate flexibility",
no specific country was singled out for criticism. While a host of countries
including Japan, the US and Germany had wanted the G-20 forum to discuss
China's withholding its exports of rare earth minerals, the issue was
apparently left off the table due to behind-the-scenes maneuvers by the Chinese
The two forums provided Hu with a platform to highlight China's contribution to
global economic recovery. "We must adopt an attitude responsible to history and
the future ... [and] work in concert for strong, sustainable and balanced
growth of the world economy," Hu said at the Seoul G-20 conclave.
Beijing's determination to use new strategies to mend fences with different
countries has been indirectly reflected by various experts' realistic
assessment of recent contretemps in the country's foreign policy. In a recent
interview with the Chinese media, Renmin University international relations
professor Shi Yinhong expressed disappointment with China's diplomatic
"We can do with some soul-searching," said Shi. "In many respects, China's
qualifications [for being a global actor] have improved, yet conditions on the
diplomatic front have worsened."
Similarly, popular military commentator General Zhang Zhaozhong indicated that
Beijing faces the most serious challenges in 30 years. "Countries like Japan,
South Korea, and several Southeast [Asian] nations suddenly turned their backs
on China and followed the United States," he wrote. "This is a very serious
Doubts, however, linger as to whether the CCP leadership is indeed willing to
turn a new page in its foreign relations. Beijing's obdurate stance on the Liu
Xiaobo issue is a case in point. Chinese diplomats have in the past three weeks
put pressure on numerous European and Asian countries not to send their
emissaries to the Nobel award-presentation ceremony in Oslo next month.
Earlier, Beijing had indefinitely shelved meetings with Norwegian officials on
bilateral issues including the establishment of a China-Norway Free Trade Area.
Such apparent bullying is a continuation of the much-criticized hardball
tactics that Beijing employed to intimidate the Nobel Peace Prize Committee
into denying Liu the honor.
Until the world sees more concrete evidence of Beijing's readiness to "hide its
capacities" and keep a low profile, yuan diplomacy alone may not be sufficient
to showcase China's status as a responsible stakeholder in the global
Dr Willy Wo-Lap Lam is a Senior Fellow at The Jamestown Foundation. He
has worked in senior editorial positions in international media including
Asiaweek newsmagazine, South China Morning Post, and the Asia-Pacific
Headquarters of CNN. He is the author of five books on China, including
Chinese Politics in the Hu Jintao Era: New Leaders, New Challenges. Lam is an
Adjunct Professor of China studies at Akita International University, Japan,
and at the Chinese University of Hong Kong.