July 14th Highlights

Geopolitics, geoeconomics, the China Model under threat, and the many BRI maps.

The map as displayed by Kazakhstan’s Deputy Minister of Foreign Affairs, Roman Vassilenko (Source: Euractiv)

Academic Exposure: Beijing’s New Strategy of Geoeconomics and Geopolitics

Discussing the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB), this article by professor Cai looks beyond the economic sphere and argues that both initiatives also have to be seen from the perspective of China’s diplomatic and security objectives, and thus “as an important part of Beijing’s overall foreign policy adjustment under Xi Jinping.” These complementary initiatives, as the author demonstrates, showcase “China’s bid to play a more active role in global governance and development.” The author lists several objectives for China:

  1. Tackling domestic economic challenges: slowing economic growth, huge industrial overcapacity, and the underdevelopment of the southern and western nations
  2. Promoting the reform of the existing international economic system: the establishment of new institutions outside the existing system to bypass the USA-dominated existing system and to increase Beijing’s influence in the regional and global economic area
  3. Promoting the use of the RMB by other countries: the expansions of the RMB’s role as an international currency
  4. Coming to terms with the changing geopolitical setting in the Asia-Pacific region since 2000:
  5. Obtaining more economic security in the face of increasing external challenges

This article provides a clear-headed discussion of the geopolitical and -economical drivers behind China’s foreign policy under Xi.

Kevin G. Cai is an associate professor at Renison University College, University of Waterloo in Canada, and the coeditor of Palgrave Macmillan’s book series, Politics and Development of Contemporary China.

Expert View: Developing Countries Can’t Resist China’s Massive Plan

In this article, Raffaello Pantucci turns the lens from China’s Belt and Road policies towards the behaviour of the recipient countries and reasons why these countries would accept investment from China. Here, the notion of China as an adversary is turned on its head, as it is not a primary concern for countries seeking “inwards investment or a balancer against other regional powers.” Pantucci offers necessary perspective on (albeit necessary to study) the debt trap diplomacy which is often linked with China’s BRI.

As such, Pantucci explains the reasons why countries opt for the “easy option” and are attracted to a “outside powers that brings jobs, infrastructure and investment.” The desired response by the West is here to:

  • To call out China’s rhetoric of creating a community of shared destiny
  • To offer alternatives to the BRI, either bilaterally or in cooperation with other powers or through international financial institutions
  • To help poor countries develop the capacity to manage Chinese investment in a more productive way

This article clearly touches upon the debate of China as development model which offers a state-led alternative to Western style of development. However, this model is not as easily transported abroad, as the controversies stirring around projects from Malaysia to Colombia demonstrate.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute (RUSI) in London.

Biggest News: Trump Challenges Xi’s China

With America launching tariffs on Chinese goods under the US Trade Representative’s (USTR) Section 301 investigation, the trade war between China and America is officially under way. While both sides have already expressed their willingness to defuse the tensions, these tensions have to be situated within the broader contest between the countries. In this light, the trade war presents China and more specifically its president Xi Jinping with a first real challenge after several years of almost unrestrained progress, as displayed by foreign policy initiatives like the BRI.

In the article, Minxin Pei argues for China to follow a strategy of “quick capitulation” to secure its continuing centrality in the global manufacturing supply chain. With no clear endgame in sight and the risk of seen as capitulating to a “trade bully” as China’s media outlets like Xinhua and People’s Daily have described the situation may turn out to be risky for China’s leader. Note that the media reports argue that the trade war touches upon China’s national interests. Showcasing the country’s tight interdependence, but with China in a lesser position, it may turn out to be Donald Trump’s Raegan moment, forcing China to curtail its geopolitical ambitions and abandon its state-capitalist model.

Minxin Pei is a professor of government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States.

To Read over Breakfast: China’s BRI, Explained by Kazakhstan

Zooming in on the many diverse maps that can be found of China’s BRI, Kazakhstan’s Deputy Minister of Foreign Affairs, Roman Vassilenko on 4 July 2018 put the project into the perspective of a Central Asian country like Kazakhstan and his country’s place in the region surrounded by bigger powers. Vassilenko also touched upon the Shanghai Cooperation Organisation’s (SCO) role in ensuring security and economic cooperation.

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