In 1978, after years of state control of all productive assets, the government of China embarked on a major program of economic reform. To awaken a dormant economic giant, it encouraged the formation of rural enterprises and private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce. Every decision Xi makes is designed to advance China to glory via his “China Dream”: he wants a communist-controlled China that is well-governed, socially stable, economically prosperous, technologically advanced, and militarily powerful by 2050. All these are covered by Xi’s leitmotif of “socialism with Chinese characteristics for a new era”. To achieve that, China’s grand strategy particularly focuses on seven main terrains: Trade, investment, financial, monetary, resource, infrastructure, institutional, technology, demographic, migration, and health. All these plans substantialized in different tools that we would be discussing in this blog post.
Starting with the obvious one, the belt and road initiative. This tool that has been mentioned the first time in 2013, is a massive global infrastructure development strategy. The belt represents the overland routes connecting China to central Asia South Asia the middle east and finally Europe, it is a network of multiple economic pathways and is made up of six corridors. Belt projects include the “China-Pakistan Economic Corridor” where more than 60 billion dollars are being invested. The Road, in contrast to its name, refers to a congregation of sea routes that connect China to South-East Asia, Africa, and Europe. This includes major investments most notably ports, like the Gwadar Port in Pakistan and the Hambantota Port in Sri Lanka. Some people interpret the BRI as a way for China to establish a “soft power” narrative to accompany its growing economic and strategic influence. The BRI offers another area of competition between China and the West. Such a large-scale project is bound to have significant geostrategic repercussions, especially in regions where geopolitical contestations between China and other major powers are on the rise. As is the case for the Indo-Pacific and the South China Sea. Since Western economic support comes with conditions attached like certain democratic reforms whereas China does not impose any conditions, this makes countries much more willing to deal with China than the West and makes the Belt and Road Initiatives the perfect opportunity to construct a viable alternative to the current international order whilst developing trans-Eurasian connectivity as well. This new strategy seems to suggest that China is keen to transform itself into a continental and maritime power.
The modern monetary system has demonstrated a remarkable capacity to accommodate rising powers. New poles of influence have emerged. In each case, the emerging actor achieved a level of capability sufficient to pose a significant challenge to the status quo. No country has challenged the existing monetary system and its institutions. Enter China with the AIIB, a financial institution that was purely founded for the interest of the middle- and low-income Asian countries to access foreign capital for much needed infrastructure and increase their connectivity. The establishment of the AIIB was not of course from the goodness of the heart of the Chinese it was of course out of interest since it positions China as a principal actor within the evolving international order by further maximizing national power by increasing its economic influence in the region and beyond, this is to be done by supplying the necessary credit for Xi Jinping’s flagship Belt and Road Initiative. The AIIB is capable of asserting China’s dominance regionally at first then globally since it seeks to make loans and extend credit to strategically important and resource-rich nations for infrastructure development that are built by Chinese companies with Chinese materials and equipment paid for with the very same loans and credit in order to make them dependent on China or, worse, claim the spoils of their choosing in settlement upon default. Sri Lanka’s port comes to mind, a project paid by the Chinese and became a crushing debt on Sri Lanka’s government which forced China to seize the infrastructure.
Other tools come to mind of course, such as the regional comprehensive economic partnership, BRICS as well as the Shanghai cooperation organisation, all projects that turned China from a non-member of the United Nations into a major actor that plays by the rule and creates its own. Can China really create another world order? If yes, is it a good idea to come back to a bipolar order that would divide the world? or are multilateralism the new order ?