China’s Periphery Diplomacy Initiative: Implications for China Neighbors and the United States

Bonnie Glaser  & Deep Pal

All eyes are on the Central Committee’s Third Plenum scheduled to open in Beijing on November 9 for details about China’s economic reforms.  As attention focuses on domestic economic development, however, Chinese foreign policy also deserves notice.  China’s president and premier have recently returned from a whirlwind tour of the neighborhood and Beijing just hosted prime ministers from Russia, India, and Mongolia. In addition, China has signaled it is set to change the way it approaches its neighbors.

For the first time ever, a high level meeting dedicated to periphery diplomacy was held in the last week of October. It is the first major gathering on foreign policy since 2006, when the last foreign policy work conference was held.  Similar to that meeting, the periphery diplomacy conference was attended by the entire Standing Committee of the Politburo, various organs of the Central Committee, State Counselors, the Central Leading Small Group with responsibility for foreign affairs, and Chinese ambassadors to important countries. In contrast to the 2006 meeting and other prior work conferences on foreign policy, however, this gathering focused only on China’s borders rather than its overall foreign policy.  The meeting re-emphasized China’s need for a stable external environment that is conducive to domestic economic reform.  Chinese media coverage of Xi Jinping’s speech suggests that Beijing is seeking to correct some of the missteps in Chinese policy toward the region in recent years, promote China’s overall influence in its periphery, and counter the US rebalance toward Asia.

In his speech at the meeting, Xi Jinping exhorted his countrymen to “strive for obtaining an excellent peripheral environment for our country’s development, bring even more benefits of our country’s development to peripheral countries, and realize common development.” Decoded from officialese, this reaffirms that maintaining a peaceful and stable periphery remains a core priority of Chinese diplomacy. The goal of creating “excellent external conditions” is required for China’s “reform, development, and stability,” Xi added.  The official Xinhua account highlighted the mutual benefits for China and the region of stability in the country’s peripheral environment, and suggested that good-neighborliness and friendship be employed to achieve win-win outcomes.

Beijing’s design for the region complements recent actions. In early October, Xi, as the first foreign leader to address the Indonesian parliament, enthusiastically advanced the idea of a “Maritime Silk Road.” Soon after, Premier Li Keqiang swept through Southeast Asia, signing agreements and offering a “seven-pronged proposal on promoting China-ASEAN cooperation.” Li also signed a new Border Defense Cooperation Agreement with his Indian counterpart – one that the Chinese Foreign Ministry described as crucial for “safeguarding border peace and tranquility.” Even before these developments, earlier in September, Xi visited four Central Asian countries to boost security and energy ties as part of the “Look West” policy. Xi’s first visit as president was to neighboring Russia, barely a week after his assumption to the post at the National People’s Congress. The idea seems to be catching on – Writing for the vernacular edition of the People’s Daily, Qu Xing, director of the Ministry of Foreign Affairs’ China Institute of International Studies, suggests that with these steps China’s relations with its neighbors has entered a period of “upgrade, acceleration, and added power.”

Although the regional policy articulated at the high-level meeting is not new, it is in stark contrast to China’s approach since 2010, especially over territorial disputes in the South China Sea where Beijing has bullied the other claimants.  Chinese brazenness was evident in 2012, when after a standoff with the Philippines, Chinese law-enforcement vessels seized control over Scarborough Shoal, changing the status quo of a land feature for the first time since 1999.  The following month, the Chinese government blocked an ASEAN joint communiqué because it was unhappy with the reference to the dispute. Earlier this year, in April, PLA troops were engaged in an eyeball-to-eyeball confrontation with Indian forces in Ladakh, on the Line of Actual Control between the two countries almost jeopardizing Li Keqiang’s much touted India trip – his first trip abroad as premier. The current overtures, or “charm offensive” as many are calling it, seem to illustrate understanding that China’s policy has been ineffective at best, and at worst, only succeeded in pushing its neighbors in to the arms of the US. Also, with the heady days of export- and investment-led double digit GDP growth behind it, reaching the targeted 7 percent plus rate of Chinese growth will need active help from the neighbors – not only as potential partners in free trade zones, but also as conduits for energy resources as in the case of Russia or Myanmar.

In his speech to the meeting on periphery diplomacy, Xi tabled many proposals that suggest a more active Chinese role in the region is in the offing, with some aimed at countering initiatives that the US has put forward.   Xi proposed accelerating efforts to develop free trade zones along China’s periphery and establishing “a new setup for regional economic integration.”  He promised to take trade with ASEAN to $1 trillion by 2020, from $400 billion in 2012. Xi also called for “active arrangements” to create an Asian Infrastructure Investment Bank and deepen regional financial cooperation.” If this is anything like the BRICS bank plan, it is likely that China would offer to pay a larger share of the capital in exchange for greater control. Similarly Li’s support for the ASEAN free trade agreement and the Regional Comprehensive Economic Partnership (RCEP) point at promoting alternatives to the Trans-Pacific Partnership (TPP).

While it has attempted to make the most of President Obama’s absence from APEC and the East Asia Summit, it is likely that China’s “charm offensive” was planned long before. What, then, is the reason for Beijing’s return to a good-neighborly policy? The answer may lie in the linkage between the concepts of China’s two one-hundred-year goals and the Chinese dream.  In his speech, Xi suggests that “doing a good job on peripheral diplomatic work is needed to realize the struggling objective of the ‘two centennials’ and to realize the Chinese dream of the great rejuvenation of the Chinese nation.” The two one-hundred-year goals refer to the 100th anniversary of the Chinese Communist Party in 2021 – when China is expected to become a “moderately prosperous socialist country” that is prosperous, strong, democratic, civilized and harmonious – and the 100th anniversary of the People’s Republic of China (PRC) in 2049. Both are extremely important milestones for the Party and the first will come up in the penultimate year of Xi’s stewardship. Through these concepts, the CCP leadership has expressed its goal of seeing the Party carry on in power at least till the middle of this century. Ensuring this is achieved will require continued economic prosperity and social stability. In other words, it is likely that the political elite believe that their resources and energy are best utilized to promote economic growth and keep social unrest at bay, rather than being expended abroad.

It is, however, unlikely that a mere internal meeting will transform things on the ground. The nature of China’s problems with its neighbors is such that despite considerable advancements in trade and economic relations, matters turn murky the moment questions of territory, jurisdiction and sovereignty come in. Twice in his speech, Xi referred to the need to “safeguard” the country’s sovereignty as part of its diplomacy toward bordering countries.  China will not likely reject its nine-dash line claim in the South China Sea, for example. Xi’s pledge that China would pursue peaceful resolution to the South China Sea disputes was delivered in Indonesia – a country with no territorial dispute with China. He made no commitment to expedite negotiations for a Code of Conduct that is demanded by ASEAN. Similarly, progress achieved with Vietnam, such as an agreement to establish a joint working group on maritime issues, while welcome, is unlikely to create sufficient trust for joint exploration of natural resources in the disputed Gulf of Tonkin. Relations with Philippines, which soured following the latter’s decision to file a case with the International Tribunal for the Law of the Sea, remain on ice and will not likely improve absent concessions by Manila. Increased tensions with Japan regarding jurisdiction over the Senkaku/Diaoyu islands that have led to a suspension in regular diplomatic exchanges are not likely to ease soon and could worsen if an accident occurs in the disputed waters. Despite the new border agreement with India, questions abound on how long confidence-building measures (CBMs) can substitute for the tackling the core issue – marking out an international border between the countries.

The question for Beijing, Washington and the region is thus – will China’s new approach help ease the competitive impulses of US and Chinese policy in Asia? The situation is especially acute in Southeast Asia, where most states are dependent on China economically but wary of its long-term intentions, and view the US as an essential guarantor of peace and stability.  Persisting angst about China’s emerging power in Southeast Asia and elsewhere along China’s periphery will likely increase calls for greater US presence and involvement.  Recognizing that America’s credibility is at stake, Washington will do its best to respond militarily, economically, and diplomatically.  If this pattern continues, US-China relations in many parts of the Asia-Pacific will be more zero-sum than win-win.  If, however, China’s new periphery policy breaks this vicious cycle by finding a modus vivendi with its neighbors over their disagreements, prospects for better US-China relations in the region will improve greatly.

The article appeared on China-US Focus on November 07, 2013.
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