CHINA: TOWARDS A SUPERPOWER STATUS — Case Study: The Chinese Influence in Africa
The recent Group of Seven (G7) summit meeting in Schloss Elmau (Germany) took place in a global context marked not only by the proliferation of crises – from the Russian seizure of Crimea and the advent of the Islamic State to the Ebola outbreak in West Africa and heightened tensions in the South and East China Seas – but also by the rise of new powers and alternative groupings, such as the Group of Twenty (G20) and the BRICS, that threaten the G7 with irrelevance, and where China plays an increasingly leading role.
Today, the G7 nations represent only one-third of global GDP, as compared to the G20’s 85 percent, and some of the most important engines of global growth are non-G7 members, such as China, India, and Brazil.
a) Among the most worrying trends pointed out by many analysts is the growing assertiveness of China as a maritime power, which adds to its economic international weight, bringing it closer to the superpower status.
This was acknowledged by the G7 members by the inclusion on the Elmau summit agenda of the topic of maritime security and the adoption of a declaration outlining the G7’ concerns regarding: the territorial disputes in the South and East China Seas; the problem of illegal, unreported, and unregulated fishing; piracy and human trafficking at sea; and the conservation of marine biodiversity. Although the declaration does not explicitly refer to China by name, there is no doubt about its primary target.
China is also seeking to extend its military presence out of the South and East China Seas. According to official sources, over the next decade China will likely establish three strings of “overseas strategic support bases”, totaling 18 facilities: a North Indian Ocean supply line with bases in Pakistan, Sri Lanka, Myanmar; a Western Indian Ocean supply line with bases in Djibouti, Yemen, Oman, Kenya, Tanzania and Mozambique; and a central-south Indian Ocean supply line with bases in Seychelles and Madagascar.
At the end of May, the authorities in Djibouti announced that China is negotiating a military base in the strategic port of Djibouti, raising the prospect of U.S. and Chinese bases being side-by-side in this Horn of Africa country. Djibouti and Beijing signed a military agreement allowing the Chinese navy to use Djibouti port in February 2014, and China aims to install a permanent military base in Obock, Djibouti’s northern port city.
In recent years, Djibouti has increasingly turned to China as a key economic partner. Last year the port operating contract was given to a Chinese company, after the previous Dubai-based operator was accused of corruption. China is also financing several major infrastructure projects estimated to total more than $9 billion (8 billion Euros), including improved ports, airports and railway lines to landlocked Ethiopia, for whom Djibouti is a lifeline port.
b) The military developments are matched by a growing assertiveness of China on the world financial arena, with two recent major successes: the creation of the Asian Infrastructure Investment Bank (AIIB) and the recent IMF acknowledgement that the renmimbi (RMB, yuan), may be included in the International Monetary Fund’s Special Drawing Rights (SDR) currency basket.
- With the infrastructure bank, China has created a bridge to most of the traditional U.S. allies, notwithstanding the U.S. concerns about the new bank. Major multilateral institutions, including the World Bank and Asian Development Bank, have also expressed their willingness to work with the newcomer.
China’s success at rallying both developed and developing nations to join the AIIB gives it an opportunity for global economic leadership. The AIIB is the first test for China’s emergence as the new leader of a changing world economic order, setting the stage for the internationalization of its currency and the emergence of Beijing as a major capital in global development finance.
- Last May, China adopted the International Monetary Fund’s standards for its latest balance of payments data as the nation seeks to obtain reserve-currency status for the yuan. People’s Bank of China officials have called for the IMF to include the yuan in the institution’s basket of reserve currencies, and adopting global accounting norms will support its case before a review later this year.
At the end of the same month, the International Monetary Fund dropped a long-held view that the yuan was undervalued, thus strengthening China’s case for the currency to win reserve status during the next IMF review, scheduled for the end of this year.
c) One of the main elements of China’s strategy to acquire a superpower status is the “Silk Road Economic Belt and the 21st-Century Maritime Silk Road”, launched at the end of 2013 by President Xi Jinping. It was released as an official document at the end of March 2015 by China’s National Development and Reform Commission, together with its ministries of foreign affairs and commerce, and it is often shortened to “One Belt, One Road.”
One Belt, One Road calls for increased diplomatic coordination, standardized and linked trade facilities, free trade zones and other trade facilitation policies, financial integration promoting the Chinese currency, the renminbi (RMB, yuan), and people-to-people cultural education programs throughout nations in Asia, Europe, the Middle East, and Africa.
Although the exact details of One Belt, One Road vary by map to map and proposal to proposal, generally, the overland belt, comprising roads, rail links, energy pipelines, and telecommunications ties, seeks to link China, Central Asia, the Middle East, Europe, and Russia. The maritime “road” will sail from China’s coasts through the South China Sea, the Indian Ocean, the Red Sea, the Mediterranean Sea (through the Suez Canal), with stops in Africa along the way. One Belt, One Road builds on earlier calls by Chinese academics to “march West” as a response to the United States’ strategic pivot to Asia.
One Belt, One Road serves foreign policy goals as well: the dual plans will also expand Beijing’s ties to major developing countries, and build support for a reshaped international system that puts China at the center of world power. Strengthened bilateral ties with nations along the dual trade routes will support China’s ambitions to build a network of non-Western international organizations in which China plays the main, if not dominant, role.
ACQUIRING THE MARITIME POWER STATUS
According to Stratfor, China is a great power which has to behave differently from other great powers, having three geopolitical imperatives: to maintain internal unity in the Han Chinese regions; to maintain control of the buffer regions; and to protect the coast from foreign encroachment.
Geopolitical and strategic factors
Apart from the attempt by the Mongols to invade Japan, and a single major maritime thrust by China into the Indian Ocean (primarily for trade and quickly abandoned), China has never been a maritime power. Prior to the 19th century, it had not faced enemies capable of posing a naval threat and, as a result, it had little interest in spending large sums of money on building a navy.
Since the arrival of Europeans in the western Pacific, in the mid-19th century, the coast became China’s most vulnerable point. Its vulnerability is, however, not military but economic. The 19th century British intrusion into China led to the destabilization of the country, the virtual collapse of the central government and civil war. The coastal cities were oriented toward the Western powers. Their economic interests were more similar to the Europeans’ and the Americans’ than to those of the Chinese central government. Thus, when the communists tried to spark an uprising in Shanghai in the 1920s, Mao Zedong failed and took the “Long March” into the interior, where he raised a peasant army. The split between coast and interior was institutionalized, and splits between coastal interests emerged as well.
Mao Zedong solved the problem by sealing the coast of China off to any real development and liquidating the class that had collaborated with foreign business. Mao saw foreign presence as undermining the stability of China. He also understood that, given China’s population and geography, it could defend itself against potential attackers without an advanced military-industrial complex. However, Mao’s strategy of closing off China to international trade, and achieving unity by excluding foreign influences resulted in internal repression and China failing to fulfill its potential.
Mao’s s successor, Deng Xiaoping, was heir to a powerful state in control of China and the buffer regions. He also felt the political pressure to improve living standards, and he undoubtedly understood that technological gaps would eventually threaten Chinese national security. He took what analysts called a historic gamble, opening China to foreign investment and reorienting the Chinese economy away from agriculture and heavy industry and toward export-oriented industries.
Deng believed he could avoid destabilization by maintaining a strong central government, based on a loyal army and the Communist Party apparatus. His successors have struggled to maintain that loyalty to the state and not to foreign investors. That is the bet that is currently being played out.
When China’s customers stopped buying after 2008, China experienced both a loss of global competitiveness based on low wages and a complex financial problem. China is now shifting to a post-low wage, post-high growth economy to a more sustainable one.
While China has achieved its strategic goals – its buffer regions are intact and it faces no threat in Eurasia – the Chinese have become highly dependent on seaborne trade and any attempt to block it would have tremendous consequences.
China’s coastline in the East is bottled up North to South by a long string of countries which it refers to as the “first island chain”, and for over seven decades, American bases throughout the region have helped make the U.S. Navy the preeminent force in the seas off China.
Today’s China is determined to become a first-rank maritime power, but Beijing must first become preeminent in its home waters. Dominating the waters enclosed by the first island chain is vital for Beijing, for two reasons.
The first is about achieving tactical dominance in its home waters, making it prohibitively dangerous for the United States to deploy the nearby 7th Fleet in a conflict over Taiwan or in war with China.
The second reason, even more important, is that China possesses a much small nuclear arsenal than the United States. Survivability for any credible Chinese second-strike capability depends heavily on nuclear-armed submarines that operate from Hainan. The United States patrols the waters of the South China Sea with the world’s most advanced anti-submarine monitoring and warfare capabilities, and — to China’s great irritation — the Pentagon constantly monitors submarine traffic from Hainan to collect acoustic and operational intelligence.
This makes the United States Navy the greatest military threat to China, since it is in a position to blockade China’s ports if it wished. Therefore, China’s primary military interest is to make such a blockade impossible, by making its price so high that the Americans would not attempt it. It is also at the origins of China’s interest to become a sea power, not only in its region but also internationally.
The “nine-dashed line” in the South China Sea
China’s first phase of its strategy aiming to assert control over the South China Sea was noted in 2009, when Beijing staked its claim on a map that it submitted to the United Nations and soon published in every new passport it issued to its citizens.
The map, a relic of the Nationalist rule in the early 20th century, became famous around the world for its most important feature, a loop in the form of nine dashes that droops hundreds of miles from China’s southernmost province, the island of Hainan, and approaches the shores of several Southeast Asian nations, to enclose one of the world’s most important waterways.
The South China Sea, which includes important sea lanes for oil shipments from the Middle East and container ships from Europe, and over which military and commercial aircraft routinely fly, is subject to the United Nations Law of the Sea Treaty (UNCLOS). The “nine-dashed line” extends nearly a thousand miles south of mainland China, close to the coastline of Vietnam, Malaysia, Brunei and the Philippines. All of these states claim the 200-mile exclusive economic zones granted under UNCLOS.
The most strategically significant in the area are the Spratly islands, some 750 rocks, atolls, islets, cays and reefs, which cover an area of 425,000 square kilometers – of the South China Sea and are disputed by the five states in the region (China, Philippines, Vietnam, Malaysia, and Brunei).
Since 1974, China has tightened its claims to the Sea and it islets, claims that were first articulated in 1947 by the Chinese Nationalist Government under Chiang Kaishek in Nanking, and which the regime in Taipei had staked in the maritime vacuum as Japan gave up claim to the islands at the end of World War II.
When the dispute over Spratly erupted, Chinese officials failed to clarify the meaning of the nine-dashed line, but, they agreed that the dashes demarcated areas where China had sovereign claims. At the same time, they agreed that the South China Sea was not a Chinese lake, and that it was governed by the UN treaty.
Since 2013, China has embarked on a campaign of land reclamation and artificial island building in the South China Sea, which in little more than a year has seeded the waterway with numerous new terrestrial positions, most of them large enough to be garrisoned and some already outfitted with runways long enough to accommodate military transport planes, thus proceeding to create “facts on the sea.”
According to a recent declaration of Hua Chunying, Beijing’s Foreign Ministry spokeswoman, China’s claims in the South China Sea were formed over “the long course of history” and have “adequate historical and legal basis.” China’s construction work is “lawful, reasonable and justified,” and is proceeding “at a pace and with a scale befitting her international responsibilities.” Freedom of navigation has never been and will never be an issue, but this concept should not be used “as an excuse to infringe upon the sovereignty, rights and security of coastal countries”, an implicit warning to the United States, who, she said, “should butt out”.
Earlier this year, analysts released images from the area of what is expected to be a 3,000-meter runway that can support military flights, a development that caused great concern among their neighbors.
The Chinese government rejected international criticisms and asserts its sovereign right to build on the islands. There are also reports that China has begun to put heavy weapons on one of them. Admiral Harry Harris, the U.S. commander in the Pacific, called it a “great wall of sand” in the strategically important waterways of the South China Sea.
By transforming rocks into islands, the Chinese government is creating a reality on the ground in asserting its sovereignty over these disputed rocks and laying the ground to claim the territorial waters around them. The Chinese statement that they will eventually allow others to use facilities on the islands for disaster relief or rescue operations is significant. To take advantage of them, users will no doubt need to acknowledge Chinese sovereignty. If China should successfully claim all of the Spratly islands, it would transform most of the South China Sea, one of the most important maritime routes in the world, into a “Chinese lake”.
China’s approach in maritime disputes is sometimes described as a “cabbage strategy”, a slow, deliberate accumulation of new island facilities and naval presence that gradually shifts the military balance in the South China Sea. The U.S. is taking seriously the prospect of being squeezed out of a crucial maritime artery that is used for up to 50 per cent of global commerce.
Moscow is unlikely to remain completely untouched by the disputes over the Spratly islands. So far, 2015 witnessed a surge in Russia’s relations with China. With many in the West attempting to present Russia as isolated, the Kremlin sees its ties with Beijing as a manifestation of the contrary. In a similar manner, China may want Moscow to help change its image of a besieged fortress.
Russia’s possible involvement in the South China Sea dispute might be influenced by Vietnam, Russia’s closest partner in Southeast Asia. Vietnam is one of the largest buyers of Russian military equipment, hosts large investment projects and is entering a free trade area with the Moscow-led Eurasian Economic Union.
As for this moment, Russia’s policy towards the territorial disputes could be described as non-existent, but – while not supporting any of the legal claims, which seems a reasonable thing to do – Moscow raises some eyebrows in Hanoi by failing to react in any meaningful way when any of the parties misbehaves.
However, the Hanoi government is aware of the fact that Russia continues to provide extensive military assistance to Vietnam, strengthening its capacity to repel a potential attack along the maritime borders of the country. Consequently, while Vietnam would like to see more Russian engagement in its squabble with China, Hanoi might not be very keen to “push” Moscow on this topic.
It is likely that Moscow and Beijing might have a “gentlemen’s agreement” according to which Ukraine (for Russia) and the South China Sea (for China) are too sensitive issues for the partner to have a firm position one way or the other.
The 2015 Defense White Paper: a sea-oriented strategy
In the 2015 Defense White Paper, titled “China’s Military Strategy”, released in late May, China emphasizes the importance of maritime security, also stressing that the land forces of the People’s Liberation Army, navy and air force would gradually shift focus from defense to offence. “The traditional mentality that land outweighs sea must be abandoned,” the paper stated.
This was confirmed, at the launching of the document, by Chinese military officials who stressed that China has made it a strategic goal to become a maritime power since, with the growth of China’s national interests, the security of its overseas energy and resources, strategic sea lines of communication and the safety of its overseas institutions, personnel and assets have become “prominent issues”.
According to the U.S. Naval Institute, the report is the first public Chinese Military Strategy white paper that outlines a new policy for “active defense”.
Beijing insisted in the document that its military is dedicated to “international security cooperation” and peaceful development. But it also said the navy will expand its focus from “offshore waters defense” to “open seas protection” as China aims to establish itself as a maritime power. The air force, meanwhile, will shift its focus from “territorial air defense to both defense and offense.”
According to Patrick Cronin, director of the Asia-Pacific Security Program at the Center for a New American Security, the white ¬paper is ¬“a blueprint for achieving ¬slow-motion regional hegemony… It asserts a confidence backed by growing capability on land and increasingly at sea. While it calls for balancing China’s territorial ‘rights’ with ‘stability,’ there should be little doubt on the part of its neighbors that China is building a maritime force to assert the former.”
The policy paper also expressed concern about the United States’ “ ‘rebalancing’ strategy,” which has led China to enhance its military presence and strengthen military alliances in the Asia-Pacific region and worry about more assertive military and security policies in Japan. The document accused China’s neighbors of provocative actions by reinforcing their military presence on “China’s reefs and islands that they have illegally occupied.”
At the same time with the white paper on defense, the state-owned tabloid The Global Times warned that war is “inevitable” if the United States tries to prevent China from finishing its reclamation and construction work. It said the risks would be “still under control” if Washington accepts China’s peaceful rise. Although not necessarily fully reflecting official thinking, the editorial shows China’s determination to continue its projects in the South China Sea.
As a unitary state actor in the international arena, China has a coherent multidimensional approach to global competition which also includes the domination of sea lanes and civil airspace in East Asia. This is one of Beijing’s top strategic goals, not just for economic and military advantage, but also for domestic political legitimacy and regional diplomatic propaganda. In this context, the most visible geostrategic flashpoint between China and the rest of Asia – and the United States as well – is China’s growing belligerence in the seas it shares with its Asian neighbors. China’s claims in the South China Sea, the Taiwan Strait and the East China Sea are certain to be resolved only one of two ways: either China gets what it wants, or, it will use armed conflict to enforce its so-called “core interests.”
The recently released United States Department of Defense’s annual report to Congress on China’s military and security developments also shows that the United States is primarily concerned with China’s naval modernization, and the People’s Liberation Army’s ground forces receive little mention, relegated to a few scattered. In this sense, the Pentagon’s 2015 report appears to be influenced by a previous U.S. Office of Naval Intelligence report which outlined China’s naval modernization in considerable detail.
A 100-year strategy to become a hegemon
As the 2015 defense white paper points out, “active defense” became the core of China’s military strategy shortly after the People’s Republic was founded in 1949. Chinese maritime strategy, accordingly, goes by the name of “offshore active defense.” The leadership updates its active-defense strategy periodically to stay abreast of new technology and shifts in the geostrategic setting, but the underlying principles remain.
In fact, active defense is a concept older than the People’s Republic itself. Mao Zedong, the Chinese Communist Party’s founding chairman, was also the godfather of active defense. That’s what Mao dubbed the strategy his Red Army used to overcome stronger Nationalist and Japanese opponents, from the party’s inception in 1921 until its greatest triumph in 1949. He codified the phrase in a much-studied 1936 essay on the “Problems of Strategy in China’s Revolutionary War.”
In brief, “active defense” is the strategically defensive posture that a big, resource-rich but weak combatant assumes to weary and turn the tables on a stronger antagonist. Such a combatant needs time to tap its resources – natural riches, manpower, martial ingenuity – so it protracts the war. It makes itself strong over time, raising powerful armed forces, while constantly harrowing the enemy. It chips away at enemy strength where and when it can. Ultimately the weaker becomes the stronger contender, seizes the offensive, and wins.
Since the time of Mao Zedong, China has been engaged in an effort to establish itself as the world’s premier superpower by 2049, the 100th anniversary of the Communist Revolution. The Chinese consider physical battles just one minor aspect of warfare. China’s main weapon, like Israel’s, is deception – the constant appearance of achieving less than they really have. This philosophy’s origins derive from a book entitled “The General Mirror for the Aid of Government” by Sima Guang and others, a statecraft manual with lessons from ancient Chinese history, centering on stratagems from the Warring States era (475-221 B.C.) that Mao brought with him on his long march in the 1930s. Described as “a statecraft manual with lessons from history that have no Western counterpart,” the book includes stories and maxims dating as far back as 4000 BC.
Included in these are lessons on “how to use deception, how to avoid encirclement by opponents and how a rising power should induce complacency in the old hegemon until the right moment.”
Chinese hardliners also promoted the book of Col. Liu Mingfu, “The China Dream” that is considered to be the inspiration behind current Chinese leader Xi Jinping’s policies, seen by some observers as increasingly Maoist.
The “assassin’s mace”
According to American researchers, China launched a secret 100-year modernization program that deceived successive U.S. administrations into unknowingly promoting Beijing’s strategy of replacing the U.S.-led world order with a Chinese-dominated economic and political system.
The Chinese strategy is aimed at gaining global economic dominance, and China’s military buildup is but one part. The combined economic, political, and military power is seeking to produce China as a new global hegemon.
According to a U.S. Defense Department report on Chinese military and technological development, the architects of China’s military transformation have placed high priority on the acquisition of so-called shashoujian, or “assassin’s mace” technologies.
Traditionally, the “assassin’s mace” refers to a weapon from Chinese folklore that guarantees a small combatant victory over a larger, more powerful opponent. In the military context, “assassin’s mace” refers to a set of asymmetric weapons that allow an inferior power to defeat a seemingly superior adversary by striking at an enemy’s weakest point.
The point of “assassin’s mace” was to make a generational leap in military capabilities that can trump the conventional forces of Western powers, but to do so incrementally, so that by the time they achieved their goal, it would be too late for the US to respond to, much less reverse.
Such technologies would include “electromagnetic combat superiority” that would allow for “naval victory,” and “tactical laser weapons” that would “be used first in anti-missile defense systems.” Jamming and destroying radar and various communications systems, and the use of computer viruses are also mentioned by the Chinese strategists.
AN AGGRESSIVE ECONOMIC GLOBAL POWER
China’s efforts to assert itself as a regional and global maritime power are generated by its geopolitical problem, which is, in fact, economic, since its export-oriented economy is in a position of dependency on the willingness and ability of other countries to import its goods, as well as the ability to physically ship them. On the other hand, the economic development of the last generation has benefited the coast and left the interior behind and also left China vulnerable to global economic forces that it cannot control.
In the context of a declining global economy, and falling of Chinese export, the new status of China as a maritime power is seen as potentially helping the coastal megalopoleis, especially Shanghai, while influencing the world economics.
One Belt, One Road – from China to Piraeus
The One Belt, One Road project, with its emphasis on high-visibility infrastructure projects, targets key littoral states located along the great trade routes in the Indian Ocean. This critical ocean region, extending from Australia to the Middle East and South Africa, is likely to determine the wider geopolitics, maritime order and balance of power in Asia, the Arabian Gulf and beyond.
Through its Maritime Silk Road, China is challenging the existing balance of power in the Indian Ocean. Its effort involves securing port projects along vital sea lanes, building energy and transport corridors to China through Myanmar and Pakistan and assembling a “string of pearls” in the form of refueling stations and naval-access outposts along the great trade lanes.
The Maritime Silk Road project is driven by the belief that the maritime domain holds the key to China achieving pre-eminence in Asia. In this light, the new Asian order will be determined not so much by developments in East Asia as by the contest for major influence in the Indian Ocean.
Since President Xi Jinping articulated the goals of the One Belt, One Road project, it was meant to be a grand strategy, by integrating the domestic needs of economic restructuring with the international ambitions of expanding China’s diplomatic and economic influence.
One Belt, One Road encompasses 64 countries, 4.4 billion people, and a combined economic output of $21 trillion (about twice the annual gross domestic product of China, or 29 percent of global GDP). This is literally China’s economic diplomacy for half of the world, under one single policy framework and Beijing is interested that nothing internationally should stand in the way of its execution.
Analysts consider that this may be the motive for the announcement, at a Foreign Affairs Ministry press conference, on June 16, that Beijing would soon conclude its land reclamation projects in the South China Sea. While Beijing’s South China Sea policy hasn’t changed and Beijing hasn’t changed its claims to the area, its current policy is seen as potentially conflicting with One Belt, One Road, because it is damaging China’s relationships with the Association of Southeast Asian Nations (ASEAN), countries on which the success of the Maritime Silk Road depends.
In fact, all 10 members of ASEAN have joined the Beijing-led Asian Infrastructure Investment Bank, one of the financial arms of One Belt, One Road, thus signaling their desire to partake in its economic opportunities. But the persistence of South China Sea tensions and China’s growing military clout in the region will dispose them to view One Belt, One Road in geopolitical terms, not in terms of economic cooperation.
Beijing is realizing that excessive and ongoing tensions in the South China Sea are detrimental to its larger foreign-policy interests. Given the greater ambitions of One Belt, One Road, the South China Sea project should not be allowed to hijack or distort the overall direction of Chinese foreign policy.
Another significant aspect is the fact that Beijing’s announcement came just before the seventh U.S.-China Strategic and Economic Dialogue, an annual series of top-level bilateral meetings, and also several months before the biggest event of Sino-U.S. relations for 2015, President Xi’s state visit to the United States in September, and the planned IMF meeting that might decide whether to include the yuan in the SDR reserve currencies.
The maritime western end of the One Belt, One Road project is the broader Mediterranean region, of real interest for China in terms of both energy security and trade. In order to provide the Silk Road with a western maritime outlet, Chinese companies have poured considerable resources into modernizing and expanding Mediterranean ports, including the Port of Piraeus in Greece.
The broader Mediterranean region, and extending down to the Gulf, is also an important source for China’s supply of energy, which is absolutely crucial to fuelling China’s industries and modernization. China’s energy interests in the region may expand, as the eastern Mediterranean emerges as a new source of oil and gas.
In the Mediterranean area, the Chinese “Belt” reaching Piraeus has as a main actor the China Ocean Shipping Company (Cosco) , the communist state’s first freight company, founded on April 27, 1961 by Mao Zedong. Almost 54 years later, Cosco is steering toward acquiring the majority of the Greek state’s share in Athens’ Piraeus Port Authority. So far, it is the most promising bidder.
Aside from Cosco, which is considered the front runner, port operators from Denmark, the Philippines, the United States and the United Arab Emirates have expressed interest. If Cosco prevails, Piraeus would then be completely in Chinese hands.
China is thinking far into the future. Piraeus is the closest port in the northern Mediterranean to the Suez Canal. From here, it can conquer the EU domestic market. Recently, three freight trains began leaving the port each week.
When Chinese Prime Minister Li Keqiang visited the port in June 2014, Piraeus was described as China’s gateway to Europe: China’s exports could reach Germany, Hungary and Austria between seven and 11 days faster. Huawei, the electronics conglomerate, has already opened a logistics center right at the port.
In fact, analysts note that in the European region, China is acting in a similar way with the global powers, targeting the EU’s weaker, less protected economies, such as those of Greece, Spain and the Balkan countries.
The Yuan: challenging the Dollar
For some time, China has sought to have the renmimbi (RMB, yuan) reflect its new status as the world’s biggest trading nation and second-largest economy. Acceptance as one of five currencies included in the IMF’s Special Drawing Rights (SDR) would accelerate its acceptance as a bona fide reserve currency.
The rewards could be substantial. Standard Chartered Bank forecasts that if inclusion were to happen this year, it could lead to cumulative foreign net purchases of China’s bonds and equities to reach 5.5 trillion to 6.2 trillion yuan ($890 billion to $1 trillion) by 2020. That would be roughly 10 times this year’s amount.
In late 2015, when the IMF is expected to hold a regular ten-year review of the basket of reserve currencies, Washington’s veto-power is less likely to be used at the executive board in its decision to include the yuan in the “basket”, since China has already gained support from key U.S. allies.
The inclusion of the yuan in the SDR could accelerate the liberalization of China’s long-closed financial markets and boost demand for the yuan by the world’s central banks. It would also be a key step in projecting China’s growing economic power in the international economy.
According to Russian financial analysts, if included in the IMF “basket”, the yuan may displace the dollar from financial turnover, the same way as the euro had displaced the dollar from international turnover before. Therefore, the use of the dollar has become tighter, with a smaller number of banks around the world willing to support it. All banks support the US dollar as a reserve currency and keep dollar reserves. If the yuan starts to displace the dollar, its sphere will diminish, and dollar supplies will turn out to be excessive. As a result, the dollar rate will start to fall.
The emergence of China’s non-convertible yuan as a staple currency in global trade raises the prospect that, should the U.S. dollar’s acceptance as the international trade medium begin to weaken, China would have a worrisome potential to undermine the dollar unexpectedly. Indeed, China is already the world’s second largest trading nation and its biggest exporter (outstripping the United States by 25 percent), its biggest manufacturer, and its biggest consumer of raw materials and natural resources. Theoretically, there is no reason that the yuan could not supplant the dollar, and, theoretically, the dollar is already vulnerable to collapse under an aggressive Chinese monetary attack if Beijing really wanted to push things to a global crisis.
China also has other plans to challenge the U.S. dollar, as this year it plans to launch in Shanghai crude-oil contracts denominated in yuan.
Wanted: a new economic world order
While analysts say that the limited use of the SDR implies that adding the yuan would be a largely symbolic move, they also stress that it would be a powerful symbol to the extent that it served as a kind of endorsement of the currency for global use. Such an outcome would not only advance the yuan’s internationalization; it would also provide insight into just how much room there is for China within the existing global economic order.
At the beginning of the current decade, it was projected that the yuan would become a global reserve currency by the end of this decade, or early next decade, based on the observation that the lag between economic and currency dominance is shorter than traditionally believed.
However, the yuan is used internationally much less than predicted. As a result, China remains subject to US monetary policy. If the Federal Reserve raises interest rates, China must follow suit to keep capital from flowing out, despite the negative impact of higher interest rates on domestic growth. Given the U.S. dollar’s dominance in international transactions, Chinese companies investing abroad also face risks associated with exchange-rate fluctuations.
In fact, over the last decade, international trade rules have created some frictions between China and other countries, including the U.S. Now, free-trade agreements are being negotiated – namely, the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership – that will undermine the continued expansion of Chinese exports, since they raise entry barriers for Chinese firms.
China has faced major challenges within the existing global system as it tries to carve out a role befitting its economic might. That may explain why, with the One Belt, One Road initiative and its establishment of the Asian Infrastructure Investment Bank (AIIB), China’s government is increasingly attempting to recast the world order – in particular, the monetary and trading systems – on its own terms.
“Marshall Plan” or economic aggression?
According to some economic analysts, China is paving its way to dominance in the global economy using the model of the Marshall Plan, the economic strategy used by the U.S. in Europe after World War 2. Similar to the U.S. in Europe, China is now conquering foreign markets and gaining control over developing countries in South Asia and Africa. Such a strategy that puts more emphasis on the so-called ‘soft power’ is more visible since President Xi Jinping came to power in 2012. China is more and more present in Africa, Central Asia and Latin America. Chinese companies, private or public, are being settled in countries rich in raw materials and free trade agreements are being signed with these countries.
Besides the economic and financial ties, China helps the developing countries finance infrastructure projects and increases the development aid paid to countries where it has strong interests. Also, AIIB, created by China to finance infrastructure projects in Asia, will defend its interests in these countries, facilitate Chinese business investments, exports of Chinese products and will ensure the supply of its raw materials.
The “soft power” strategy is mixed with a constant increase in Chinese military spending, which is interpreted as a sign of the “hard power” used to gain an increasing role on the international scene.
According to a recent testimony before the U.S, Congress , China’s economic strategy is aiming to ‘lock up’ energy supplies around the world, a feature sometimes described as “mercantilism”. It is not just energy supplies that China is “locking up” but mineral and agricultural resources as well.
The Chinese state uses all means, licit and illicit, to achieve its economic goals, from foreign exchange manipulation, commodities monopolies, predatory business practices, cyber intrusions to gain market-moving information, theft of intellectual property and proprietary business information, intimidation of trade partners, arrests of foreign businessmen, even scamming international carbon trading markets designed to reduce global climate change.
China is also expanding rapidly its demographic footprint around the globe with intensive out-migration to developing countries in Africa, Latin America and the Caribbean, Central and North Asia, the Russian Far East and the Pacific, notably in the form of labor force engaged in construction and infrastructure projects which then remain in their host countries after the projects are completed. These new communities of overseas Chinese have significant impact on host country economies and politics.
“SOFT” AND “HARD” POWER IN AFRICA
The One Belt, One Road project also stresses Africa’s geostrategic and commodity rich significance. Africa is central as both a conduit and destination within this trade route.
Recently, a campaign has emerged in China calling for the inclusion of Africa in the One Belt, One Road strategy, making it “One Belt, One Road, One Continent”. While the inclusion could surely bring more momentum to China’s economic cooperation with Africa, it does not resolve, and actually could amplify the existing problems in current Sino-African relations.
China’s investment in African resources is likely to increase further over the next decade. At the 2012 summit of the triennial Forum on China-Africa Cooperation (FOCAC), China offered $20 billion in loans to African countries, doubling its previous offer. As bilateral trade volumes have grown, Beijing will be expected to offer billions more at this year’s forum in South Africa, despite its domestic economy having cooled in recent months.
China has become one of the main investors in sub-Saharan Africa, which boasts six of the 10 fastest-growing economies in the world, buying assets in developed markets and investing in infrastructure development. For example, a China-backed railroad in Kenya seeks to eventually link Mombasa with Nairobi and, further on, cities in South Sudan, the Democratic Republic of Congo, and Burundi.
Africa remains a priority for Chinese companies looking to invest, especially those with a strategic interest in metals and mining and related infrastructure. This is aligned with the macroeconomic long term view of China’s economic trajectory and vision of Beijing’s leaders.
Through infrastructure development, China could both foster the growth of African countries and transfer its labor-intensive industries to Africa. This general focus on infrastructure seems to be confirmed by the signing of a Memorandum of Understanding (MOU) between China and the African Union on January 27, 2015. The ambitious agreement plans to connect all 54 African countries through transportation infrastructure projects, including modern highways, airports, and high speed railways. While these developments are not officially a component of One Belt, One Road, many in China have begun to draw linkages between the two.
Cheap loans with secondary effects
Including Africa in the One Belt, One Road strategy is not seen as solving the long-standing questions in China’s economic relations with Africa. The plan does not address issues such as the controversial relationship between China’s infrastructure investment and its interests in African natural resources. Nor does it touch upon Chinese companies’ sometimes irresponsible investment behavior, especially in social and environmental regards. In fact, prominent Chinese experts have excluded the discussion of these issues in their analysis of China’s infrastructure development and industrial transfer to Africa. Moreover, people wonder whether Africa is capable of repaying Chinese loans, and, if so, how. In addition, the political risks and volatile investment environment in some African countries will inevitably affect the planning and implementation of Chinese projects. How China will address them is completely missing in its grand development strategy in Africa.
For the African states, China offers a source of both aid and investment, which is not immediately tied to governance reform or other political criteria. For China, the investment is most certainly a business decision, first and foremost. However, an important secondary issue for China is promoting its view of non-intervention in the sovereign affairs of other nations.
Another benefit is the cheap terms that such investments bring. Especially when compared to commercial markets or institutions like the World Bank, Chinese financing deals provide access to funding at very attractive terms. Interest-free or low interest government loans are common, such as the $2 billion credit line at 1.5 percent for 17 years to Angola for oil exploration and the $2 billion subsidized loans to Ghana for oil and gas projects in 2010.
However, the non-pecuniary costs of cheap Chinese loans are significant. The Chinese bring their own workers to construct these projects and expect to be given preference when it comes to being granted mining and other licenses in Africa. They also expect not to have to deal with regulations in the countries to which they provide infrastructure benefits.
Another issue has been building quality, many people being attracted by the cheap initial price and not realizing that cheap infrastructure, from a maintenance standpoint, is going to be very expensive over the long-term.
The social problems are also present, since the Chinese are often bringing their own labor, they’re buying their own food and don’t mix with the local population, which creates tension. This is in part due to a lack of coherence between official policy from Beijing and the actions of businesspeople and workers on the ground, as well as distrust between local Africans and Chinese émigrés.
While many Africans appreciated the apolitical terms under which African nations can conduct business with China, there are also growing complaints against the behavior of the Chinese in Africa. There have already been reports of Chinese investors abandoning investment projects in several Sub-Saharan Africa states, and infrastructure investment being slow to materialize.
Politicians in Botswana, for example, have pointed to problems with large building contracts awarded to Chinese companies. Some of the projects have already stalled, with the contractors running way behind schedule. Several other countries such as Zambia, Senegal, Namibia, Malawi, and Tanzania have reported problems with the Chinese. And China’s Prime Minister Li Keqiang himself has admitted in 2014 to “growing pains” in Sino-Africa ties, amid allegations by Africans of shoddy construction and a lack of respect for labor and other local laws.
In a recent book called “China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa”, author Howard French, an American journalist who has lived and worked in Africa for the New York Times, suggests the existing cooperation benefits China much more than it does Africa and that China is just an imperialist power out to secure raw materials for its industries back home.
According to Howard French, the Chinese have a similar approach with that of the former colonists. They build ports so that they can send their goods to that country, and so that they can export from that country to their markets the things they need from that country.
Another negative aspect is the fact that China is creating these very powerful feedback loops for its own victory, in fact cutting Africa and African countries out of the equation in terms of the benefits. Jobless Africans detest the fact that work that they should be doing is going to foreigners. But their hands seem to be tied and there is nothing or little they can do about this.
Economic help for rogue states
As Chinese aid increases, Africa can also expect to witness notably more incidences of state-sponsored domestic violence, both against civilians and competitors such as rebel groups.
According to a recent working paper of the University of Sussex’s Department of Geography, titled Chinese Aid and Africa’s Pariah States, this effect is largely because aid from China is fungible, with its use determined by recipient countries. The same is not observed in the case of the aid from ‘traditional’ or Western donors, that comes tagged with conditions.
Because Chinese aid is disbursed under a “non-interference policy” that does not seek to influence the domestic policies of recipient states, leaders have a lot of leeway over where it is used. Due to the lack of conditionality, African leaders can use Chinese aid in the ways they see fit and suited to their political, economic and social needs. In practice, Chinese aid directly supports the regimes of states.
The study finds that while Africa’s resources are important for feeding China’s growth, Beijing also seeks new markets for its goods, and to build international coalitions with non-Western states including those in Africa, for pursuits such as support for its “One China” policy. Consequently, its aid is directed towards whichever countries satisfy those needs, and acknowledged pariah status is not a pre-requisite for large Chinese aid packages. Significantly, the countries that have not benefited from China’s aid have been pro-Taipei Burkina Faso and Swaziland, and Gambia until it cut ties with Taiwan.
Though China isn’t specifically giving aid to ‘pariah states’, it is making states into pariahs through providing resources to state leaders who are unafraid to use repression as a means to quell competition.
Because Chinese aid is meant to benefit China, the study found that countries with a weaker rule of law get more aid as they have an environment that allows Chinese business to flourish. Additionally, increased Chinese aid relative to a state’s GDP led to more incidences of state-supported conflict, while rebel groups or other conflict actors were not seen to be taking up arms any more due to the availability of Chinese aid. In short, Chinese aid increases the ability of the state to repress domestic competition, opposition and civilians. Compared to traditional aid, the effect is limited to state forces and goals.
Often the strategies and tactics for ensuring regime stability might be outside the preferred conduct of Western aid donors, so “unconditional” Chinese aid is attractive. Also noted was the use of Chinese aid for ‘prestige’ projects or funneling money to allies and supporters, one of the reasons for which Chinese aid has been particularly useful to African leaders seeking to remain in power.
Challenging France in Africa
The French make no secret of their alarm over growing Chinese influence in former French Africa. French former Finance Minister Pierre Moscovici stated that French companies must go on the offensive and fight the growing influence of rival China for a stake in Africa’s increasingly competitive markets. “It’s evident that China is more and more present in Africa…(French) companies that have the means must go on the offensive. They must be more present on the ground. They have to fight.”
The three reports issued before the December 2013 Élysée Summit for Peace and Security in Africa, which gathered 53 African delegations in Paris, also pledged for a new strategy in France-Africa relations. Although France does not officially draw inspiration from Chinese politicians, this evolution highlights the rising competition among global powers on the continent.
The reports assess the France-Africa relations and come up with recommendations. The senatorial report by two senators specialized on Africa (Jeanny Lorgeoux and Jean-Marie Bockel) is entitled “Africa is our future”. The National Assembly commission for foreign relations issued a report on African Anglophone countries, showing that France presence in this region is too limited when considering Africa’s economic potential. Finally, a report for the Ministry of Finance calls for better economic partnerships, as 200 000 French jobs could benefit from exports to Africa.
These evolutions result from a review of the French presence in Africa: France’s previously strong position on the continent is weakening, in the face of the fast rise of Africa on the agenda of emerging powers like China, Brazil, India, Turkey. Since the focus of African countries is shifting away from France’s assistance, France, however, definitely needs African countries for its own economic growth. The French narrative mainly reveals how China is viewed as a competitor in the African market. China’s shares in Africa soared from 2 per cent in 1990 to 16 per cent in 2011. Between 2000 and 2011, France’s shares in sub-Saharan Africa decreased from 10.1 per cent to 4.7 per cent.
The competition also lies on the diplomatic level and with regards to prestige. While China succeeded in gathering 44 African countries at the 1st Forum of China-Africa Cooperation (FOCAC) in 2000, then French President Mitterrand got together only 37 heads of state and governments in 1990 at La Baule (where he famously committed to promoting democracy in Africa). Japan, Korea, India and Turkey also organize their own Africa meetings. While China increases its presence, France has recently reduced its diplomatic staff in Africa, surprisingly even in strategically important and rapidly developing countries like Mozambique.
In France’s new strategy towards the Chinese approach, one may see some aspects that may even have been inspired by the Chinese. Since China-Africa relations are free from the heavy colonial history, China has been able to develop relations with almost all countries in Africa, while France mainly focused on French-speaking countries. Paris now intends to catch up in other parts of the continent, particularly those that are economically growing, such as Angola, Kenya, South Africa, Nigeria and others. This is similar to the Chinese pragmatic approach, where every single country is considered as a potential partner for economic ties.
This expanding scope also implies to consider African countries as equal partners, as China has been doing since the Third World solidarity movements. The French senatorial report calls for the promotion of “shared interests”, which can remind of the Chinese discourse on “win-win relations”. Henceforth, France may concentrate more on pragmatism, considering aspects like investments, commercial ties, and economic partnerships. The shift towards less paternalistic and more business-focused relations is, indeed, closer to the Chinese approach in Africa.
This change presumably will help to move the discourse from “aid” to “business”. Already in 1983, when Zhao Ziyang visited Africa, he preferred talking about mutual co-operation and did not use the word “aid” once. With the new policy, France is now officially favoring the “partnership” dimension instead of the donor-recipient narrative.
Joining forces with Japan
The need to address China’s rising influence in Africa was stressed as a concern by both France and Japan, in 2014, during a meeting of the foreign and defense ministers. Japan pledged to support ongoing French wars in two former French colonies, Mali and the Central African Republic (CAR). Japan has contributed €735 million to the French military intervention in Mali, and Paris also expects that Tokyo will also provide financial assistance for France’s war in CAR.
In turn, following the talks between French and Japanese ministers, a joint statement was issued apparently criticizing China’s declaration of an air defense identification zone (ADIZ) that covered the Senkaku/Diaoyu islands that China disputes with Japan.
Some analysts noted that the decision of the French government to cancel the contract of selling two Mistral-class helicopter carriers to Russia might even backfire in Africa, where France might no longer count on Russia to support its interests against the Chinese challenge. In this context, rumors appeared according to which at least one of the ships may finally reach China. Amid a warming of Paris-Beijing ties, the Dixmude – another Mistral-class vessel – attracted speculation when it docked in Shanghai last May. However, analysts pointed out that, with growing tensions in the South China Sea, France is not seen willing to risk alienating Japan, with which it has just signed a defense cooperation deal, let alone suffer the displeasure that such a move would incur in Washington.
Japan is also challenging Chinese influence in Africa. In 2014, while Japan’s foreign and defense ministers visited Paris, Japanese Prime Minister Shinzo Abe began his five-day tour of sub-Saharan Africa, the first such visit by a Japanese prime minister in eight years. Reacting to Abe’s visit to Africa, China’s state-owned China Daily noted that the Japanese leader is seeking to “contain” China’s influence in Africa.
Africom vs. China in Africa
According to many local observers, Africom , the Pentagon’s US Africa Command, is another project, this time initiated by the U.S., which has as its main purpose to counter the Chinese economic and political influence across Africa.
Various Washington sources state openly that Africom was created to counter the growing presence of China in Africa. Dr. J. Peter Pham, an advisor of the U.S. State and Defense Departments, stated that among the aims of Africom is the objective of, “protecting access to hydrocarbons and other strategic resources which Africa has in abundance … a task which includes ensuring against the vulnerability of those natural riches and ensuring that no other interested third parties, such as China, India, Japan, or Russia, obtain monopolies or preferential treatment.”
In a testimony before the US Congress supporting Africom, Pham also stated: “This natural wealth makes Africa an inviting target for the attentions of the People’s Republic of China, whose dynamic economy, averaging 9 percent growth per annum over the last two decades, has an almost insatiable thirst for oil as well as a need for other natural resources to sustain it… Many analysts expect that Africa – especially the states along its oil-rich western coastline – will increasingly becoming a theatre for strategic competition between the United States and its only real near-peer competitor on the global stage, China, as both countries seek to expand their influence and secure access to resources.”
To counter the growing Chinese influence across Africa, Washington has enlisted France, with promises of supporting a French revival of its former African colonial empire in one form or another. An example is the map used by Washington for combating terrorism under the Pan-Sahel Initiative, where the range or area of activity for the terrorists is very similar to the boundaries or borders of the colonial territorial entity which France attempted to sustain in Africa in 1957. Paris had planned to prop up this African entity in the western central Sahara as a French department (province) directly tied to France, along with coastal Algeria. The French called it the Common Organization of the Saharan Regions (Organisation commune des regions sahariennes, OCRS). France was forced to dissolve the OCRS in 1962, because of Algerian independence and the anti-colonial mood in Africa.
A new Chinese policy for the MENA region
So far, Chinese policy makers have shown no interest in challenging the U.S. role of maintaining hegemony in the Middle East and North Africa (MENA) to create stability and facilitate the flow of oil. However, China has to some degree included the Middle East in its strategy of building infrastructure projects in less-developed countries and establishing substantial settlements of Chinese workers there.
Chinese political influence is primarily an adjunct to business interests. In Libya, the strategy accounted for the Chinese presence. A comparable number of Chinese workers probably still exist in Algeria, and there are Chinese workers elsewhere in the region.
Notwithstanding China’s preference for a low-key political profile in the MENA region, political upheavals during the past decade have given Beijing the opportunity to enlarge the Chinese presence in the region. China’s newfound activism, combined with regional political actors’ desire to diversify their economic and political partners, is beginning to foster a new political dynamic in the Middle East. Although the United States and Europe continue to be the most significant extra-regional actors in the region, MENA regimes increasingly seek a higher level of Chinese involvement in the Middle East and North Africa.
On the other hand, the MENA region has become home to hundreds of thousands of Chinese expatriates who repeatedly have had to be rescued from escalating violence in countries like Libya, Syria, Iraq and Yemen or who were taken hostage by insurgents or criminal gangs in places like Egypt’s Sinai desert and Sudan. As a result, China has been forced to breach its policy of non-interventionism by establishing ties to opposition forces in countries like Libya, Syria and Afghanistan to hedge its bets in situations of political change.
The rise of Daesh, which is attracting hundreds of Chinese Muslims as foreign fighters, is further forcing China to have a new approach towards the MENA region. China realizes that such a new approach would allow it to increasingly relax its long-standing insistence on non-interference in the domestic affairs of others while ensuring it is not seeking to become a global military power through the establishment of military bases in far-flung lands.
Daesh’s expansion in Iraq also put the group in direct competition with China for access to Iraq’s energy resources. As a result, China has agreed to intelligence cooperation with the U.S.-led coalition in Iraq while some analysts have called on the government to contribute financially and materially as well as with training.
Over time, China’s increasing presence in the region will shift China’s interest in the Mediterranean. Large business investments will drive a national interest in stability. Instability is what caused China to have to evacuate workers, which is the local reason China now has a naval presence in the Mediterranean.
Joint military drills in the Mediterranean
The recent joint naval exercises with Russia in the Mediterranean were considered by most analysts as a sign of China’s growing involvement in the Middle East and North Africa. The naval drill code-named “Joint Sea 2015” was held from May 17 to 21 and involved nine ships from both countries.
China has twice in recent years had to send its ships to rescue and evacuate significant numbers of Chinese workers who fell into danger as a result of regional instability. The first time was in Libya, where 35,800 Chinese workers had to be evacuated after the 2011 uprising and subsequent bombing campaign to bring down Muammar Qaddafi. The second time was in late March and early April, when Chinese ships helped offload several hundred Chinese workers from Yemen as the situation there further deteriorated and Saudi airstrikes escalated.
The exercise, which evoked Soviet maneuvers in the Mediterranean 40 years ago, also appeared to be inspired by American geopolitical scientist Nicholas Spykman, who ascribed the age of British maritime supremacy to the Royal Navy’s control of the “girdle of marginal seas” ringing Eurasia’s coastlines. He called the South China Sea – the site of territorial disputes among China and several other nations – the “Asiatic Mediterranean.” Seagoing forces could move around the periphery quickly and economically relative to land transport, radiating power and influence into the Eurasian rimlands from the sea. Mobility and seaborne firepower let Britannia rule. By maneuvering in the Mediterranean Sea, the Russian and Chinese fleets project power into European waters – much as the Royal Navy projected power into Asian waters via the South China Sea and other littoral regions.
Some observers noted that to Chinese and Russian eyes, surrendering control of offshore waters to the U.S. Navy looks like surrendering control to the Royal Navy and fellow imperial powers a century ago. Historical memory is especially acute for China, which lost control of its seaboard and internal waterways to waterborne conquerors. But Russia endured traumas of its own: It watched the Imperial Japanese Navy demolish the Russian Navy during the Russo-Japanese War of 1904-1905. China and Russia hope to banish such memories while turning Spykman’s logic of nautical supremacy to their advantage. If successful, this might be seen as a challenge for the United States in Asia while projecting power into NATO waters.
This has implications for both the United States and its European NATO allies. The Mediterranean is no longer NATO’s mare nostrum, and this is a reflection of the broader global shift of power away from the West and toward Asia. For some analysts, the recent Russian-Chinese naval exercises also demonstrated the European Union’s little capacity to defend or even control by itself its southern flank.
For the United States and Europe, a strengthened Chinese role in the Middle East presents both challenges and opportunities. China greatly values its economic and political partnership with the United States and the EU, and is concerned with preserving political stability and fostering its economic ties in the Middle East. The question is whether China’s approach to stability in the region will prove compatible with US and European policies and priorities, or will challenge them.
A changing relationship
The multi-billion dollar transactions and the political summits resulted in an African incline towards China’s commercial sphere of influence. This trend has been accelerated by West’s financial and economic crisis, with African economies reorienting towards the emerging rather than the developed world.
China’s Africa-MENA policy has become increasingly fused with that of the management of its own economy. Beijing is no longer just an actor in Africa’s resources sector but is broadening the scope of its commercial foray into the continent. Underpinning Beijing’s engagement of Africa has been a desire to secure a number of strategic commodity supplies, in particular oil, iron ore and copper. In the mindset of the Chinese government, its own growth model may be at risk from restricted resource supply. China’s ability to guarantee the supply of key resources from resource-endowed African states is strategically important for Beijing. Thus, a politically welcoming environment among African governments is of paramount importance for Chinese capital.
The nature of the China-Africa relationship is gradually changing. While resources have underpinned China’s foray into Africa throughout the first decade of its “new” foreign commercial relationship with the continent, a shift is taking place, increasingly being shaped by market forces.
Accordingly, China’s relations with Africa are seen to become less state-driven and more characterized by the market, as a result of China’s own evolving economy as well as the gradual declining support by Beijing for its state-owned enterprises in Africa, particularly the construction sector. Despite the Chinese government still pledging a further sizeable sum of $20 billion in investment in Africa over a three year period, it can be argued that China’s state-directed capital towards the continent will play less of a role in the growing trend of Chinese market-driven outbound investment.
However, as China’s trade and financial interests grow around the world, and as Chinese immigrant communities become larger, especially in places like large parts of Africa, where there was little prior tradition of Chinese migration, Beijing will begin to operate more and more like a traditional great power, flexing its muscles, both politically and militarily, when the need arises, to protect its people and its perceived interests.
But as China’s strategy towards Africa matures, so too must Africa’s strategy towards China. China’s foreign policy towards the continent under President Xi Jinping will need to balance its growing commercial interests while having to accommodate a changing and more assertive Africa.
Since the turn of the 21st century, China has been back in the international community (i.e., it became a member of the WTO in 2001), and most analysts think it is on its way to becoming the world’s next great power. The initial Chinese response was contained in an article by the Chinese thought-leader Zheng Bijian, published in 2005 and entitled China’s Peaceful Rise to Great Power Status.
In the ensuing years, China became a global economic superpower with interests extending to all continents (including the Arctic). China needs open access to markets, but even more so it needs open access to its vital sources of supply in food, raw materials and energy. It also sees a world in geopolitical mutation. For the Chinese, the U.S. hegemon is both retreating and threatening, while ultra-nationalism is resurgent in Japan.
Compulsory reading among the Chinese Communist Party leadership is the work of Alfred Thayer Mahan (1840-1914), the U.S. naval admiral and geo-strategist, The Influence of Sea Power upon History: 1660-1783, which remains the most influential text on the geopolitical imperative of sea power.
While economic development was the major Chinese goal of the last three decades – and remains paramount – it seems likely that naval development will be the major goal in the next three decades especially as the Chinese, inspired by Mahan, recognize that China’s global economic superpower status can only be sustained by being a global naval superpower.
On the other hand, One Belt, One Road could stretch China’s foreign policy doctrines and capabilities to a breaking point. China’s rhetoric about win–win outcomes, consensus-driven decision-making, and avoiding interference will bump up against the hard realities of protecting Chinese citizens and investments.
Although Chinese Foreign Minister Wang Yi has stated that One Belt, One Road is “not a tool of geopolitics,” China will likely attempt to turn economic cooperation into political influence. Doing so will require Beijing to overcome a number of difficult obstacles, primarily, managing great power competition with India, Russia, and the United States within Central Asia, South Asia, and the Middle East.
Russia’s efforts to create a Eurasian Union linking former Soviet states pose direct competition to China’s own integration strategy, even though Chinese-Russian relations are on the mend. India would have reservations about Chinese regional aspirations as well, since Beijing’s programs could hinder its own “Act East” and “Connect Central Asia” policies. Chinese maritime expansion into the Indian Ocean – especially within ports that could serve as staging grounds for Chinese naval operations – only adds to India’s unease. Although the United States’ involvement in Central Asia is waning as its role in Afghanistan winds down, Chinese involvement across Eurasia, the Indian Ocean, and the Middle East will test Beijing’s ability to balancing competition with cooperation.
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In 2012, Hillary Clinton, the U.S. secretary of state, noted that “the Pacific is big enough for all of us”. In his July 2013 tête-à-tête with US President Barack Obama, President Xi Jinping echoed the same: “The vast Pacific Ocean has enough space for two large countries like the US and China.” It remains to be seen if the future will prove right the Chinese and American hopeful declarations.