China’s increasing influence on political issues has placed herself under the spotlight of international affairs. The extent to China’s approach in foreign policy is still a much-debated topic among politicians and academics. In effect, to analyze China’s approach, it is essential to evaluate foreign policies that she has carried out in recent years. While some argue that China has ambitious intentions to change the current world order, it is essential to understand that the wake of a fallen giant like China will inevitably restructure power relations in the international system.
I agree that China has adopted proactive measures in foreign policy and has brought restructuring of power relations. However, the extent to which the restructure occurs is limited by various factors. I will evaluate these factors in two articles. In part one, I will argue that China has adopted a proactive parallel approach in dealing with international affairs. Although proactive, her approach should not be considered as aggressive. I will illustrate my argument by providing examples, particularly in the financial and economic context.
This will slowly reshape world order from unipolarity to bipolarity with the United States (US) and China as the two dominating powers. If China were to continue its global influence in power relations, she has to address the challenges accurately and acutely. In the conquest of rebalancing world power, I argue that China will face limitations due to restrictions on soft powers. The limits root from its soft power concerning domestic values and human rights issue.
In modern years, China has been discontented with its share in existing international institutions. For instance, China only holds 6.4 percent of shares as compared with America’s 15.6 percent shares in the Asian Development Bank. With its increasing economic and political power, China adopted a parallel approach which establishes parallel structures to a wide range of existing international institutions. She does not aim to destroy nor exit existing institutions. In order to counteract these disadvantages, she established multiple organizations which are analogous to the existing ones dominated by the US.
A prominent example is the Asian Infrastructure Investment Bank (AIIB). The AIIB, established in 2016, is a multinational bank which aims to support the building of infrastructure in the Asia-pacific region. With 28 percent of the voting share, China is the largest shareholder of the bank. In 2016 alone, the AIIB had approved nine major development projects and loaned more than $1.7 billion US dollars. As of 2017, the AIIB has 77 member states with countries outside of Asia, such as the United Kingdom and Germany.
The AIIB is strategically manipulated by China to manifest its political and economic ambitions. The China-Pakistan Economic Corridor is a major component of the One Belt One Road policy (OBOR). The motorway project taken place in Pakistan is a prime example of how the AIIB-financed projects facilitate Chinese policy objectives. It acts as a major pathway for China to gain access into Pakistan which effectively shortens China’s transit time to the Arabian Sea. If the OBOR was successful, the economic trade would be facilitated and China’s influence among the region will effectively increase.
On the other hand, China has also taken proactive measures in international trade policies. Despite showing interest in joining existing global trade initiatives, China is excluded from major trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership. China’s parallel initiative aims to benefit itself from low trade barriers. As a result, China participated in the Regional Comprehensive Economic Partnership (RCEP) which is regarded as an alternative to the TPP. Not only does it aim to promote trade in economic goods, but also intellectual property and technology within the region. Although not in force yet, the RCEP is anticipated to encompass around 40 percent of the world’s GDP and 45 percent of the world’s population, the accumulative economic power of the member states sufficiently creates a threat to institutions like the TPP.
While China continues to increase its influence on other countries, it faces significant constraints in gaining global influence. China’s manufacturing and export-based growth model is one that is unsustainable. For her to grow sustainably in the future, she has to adopt a model which puts greater emphasis on research and development. However, as of 2016, China had a GDP growth rate of 6.8%, which was a new low since the early 1990s. This suggests that China’s economic growth will soon reach a bottleneck if she does not adopt a more sustainable model.
The manufacturing sector continues to be the greatest contributor to China’s GDP. Constituting approximately 20% of the world’s population, China enjoys the advantages of low labour costs due to its vast labour supply. Nonetheless, wages in China has continued to increase over the past few years, manufacturers began to seek for alternatives in less developed countries like Vietnam and Cambodia. Therefore, in order to counteract the lost in manufacturing advantages, China has sought to develop a new sustainable growth model which lays its focus on research and development. Yet, according to Paul Krugman, China’s miraculous economic growth has been based on pre-inspiration. With reference to the automobile industry in China, ‘copycat cars’ are everywhere in the local market.
One might not be surprised to spot lookalike duplicates of famous western brand names such as BMW or Land Rover. This implies that although China has invested a lot of capital in research and development, more efforts have to be put in to promote originality and innovative motives. Chinese copyright laws do not provide protection of foreign technology. Not only does it create a negative image of the country as a whole, but also hinders economic growth in the long term. Hence, it is only when China develops its own technology, can its economic growth be sustainable.
I have demonstrated that China has taken proactive foreign policy under a parallel strategy by providing examples of the AIIB and the RCEP. Although proactive, China’s intention is not to disrupt current orders or institutions. Rather, it seeks to do things in her own way. In part two of the article, I will further provide examples of China’s policy on military issues and its constraint which stems from the limitations of her soft power. I will also provide a detailed conclusion for the topic. Please stay tuned for my next article.