China aims to set the regional cooperation agenda

Author: Chen Dongxiao, SIIS

In late October 2013, the Chinese Communist Party Central Committee held a conference of Diplomatic Work with Neighbouring Countries  in Beijing, where it unveiled new priorities under its New Neighbourhood Diplomacy guidelines. The new approach makes China’s neighbourhood, covering both continental and maritime Asia, the top strategic priority for the first time. The key message of the conference was to reassure to the region that China will step up its proactive engagement with its neighbours. This is to be achieved by converting its rising economic and political clout into more regional public goods and paving the way for a community inspired by a common destiny.

Multiple strategic initiatives underpin China’s new emphasis on regional diplomacy. On the economic side, the prospect of downward pressure on regional growth and the fragmentation of regional trade and investment negotiation processes are two major challenges for China. The Silk Road Economic Belt and the 21st Century Maritime Silk Road—now synthesised as the Belt and Road Initiatives—are arguably Beijing’s boldest flagship proposals under the New Neighbourhood Diplomacy approach. The Belt and Road Initiatives aim to visualise a new mode of regional economic cooperation by tapping the huge potential for regional investment and trade, and taking advantage of economic complementarities between China and other regional countries. It is  also expected to further common interests by upgrading regional production, transportation and value chains.

For China, the initiative is already beginning to bear fruit. The Asia Infrastructure Investment Bank (AIIB), a new regional development bank initiated and led by China, has proved popular—attracting 57 founding members, including the UK, Germany, France, Australia, South Korea and many other advanced economies. More than 60 countries have expressed their interest in partnerships with the Belt and Road Initiatives. And many countries along the proposed Silk Road Economic Belt and the 21st Century Maritime Silk Road have already began talks with Beijing on coordinating policy, connecting facilities and better integrating trade and finance, as well as establishing people-to-people ties.

Ambitious as it is, the Belt and Road Initiatives are also the most complex projects Beijing has ever undertaken. Without efficient collaboration between the multiple stakeholders—including governments, NGOs, enterprises and the general public, both at home and abroad—it is unlikely to succeed.

In parallel with the Belt and Road Initiatives, China is also promoting another landmark initiative: the Free Trade Area of the Asia Pacific (FTAAP). The FTAAP has set the tone for the 2014 APEC economic leaders’ meeting in Beijing. China’s endorsement of the FTAAP demonstrates its commitment to more open, liberalised and high-quality trade and investment, as well as a more integrated regional economy.Beijing believes that the FTAAP can provide an overarching framework that transcends the narratives of competition between the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP)—the two leading regional trade negotiation groups in the Asia Pacific—and help develop a roadmap for mutual accommodation and co-evolution of various regional trade & investment arrangements. Like the Belt and Road Initiatives, FTAAP is a long-term process and can only be realised through cooperation with other key economies, particularly the US, Japan and India.

Even more challenging is the issue of regional security. Today China faces multiple regional security challenges that range from diverging security perceptions, a rising security dilemma and deficiency of security public goods to managing maritime disputes and a plethora of other regional traditional and non-traditional threats. Under the guidelines of the new neighbourhood diplomacy policy, China is now engaging with regional security issues in more a more active way. It is participating in and sometimes leading  regional security capacity and confidence building measures (CBMs), such as collective natural disaster relief, joint rescue and patrol, and anti-terrorism exercises, as well as rebuilding security in Afghanistan and mitigating tensions on the Korean Peninsula. China has also been building up regional security institutions by upgrading the security cooperation in the Shanghai Cooperation Organization (SCO), resetting the Conference of Interaction and Confidence-Building Measures in Asia (CICA) and initiating many bilateral and multilateral CBMs meetings with neighbouring countries, including those between China and the ASEAN defence ministers.

China fully recognises that there is not yet a consensus on what kind of security order is appropriate for the Asia Pacific region at a time when there is a major rebalancing between rising and established powers. For instance, there is disagreement over whether the US-led alliance system is still legitimate and sustainable given the relative decline of US influence in the Asia Pacific. The lack of agreement over the regional security order will hamper security cooperation in the long run.

In May 2014, at the CICA summit meeting, President XiJinping talked about developing a commitment to a new security order based on the ideals of common, comprehensive, cooperative and sustainable security. He also encouraged Asian countries to play a leadership role in building this new order, with the engagement of key players outside the region. The Chinese understanding of a new security order in the Asia Pacific implicitly challenges the exclusiveness of the US-led alliance system. It has therefore caused suspicion and scepticism on the part of the US and some of its key allies in the region. How to reconcile these differences and develop a shared definition of regional security order among all major stakeholders? How to work out inclusive regional security architectures where China, the US and many other regional key players can not only peacefully co-exist but also cooperate in providing more security public goods for the whole region? These questions remain  key challenges for China if it is to play a bigger role in regional leadership in the future.

Professor Chen Dongxiao is President of the Shanghai Institutes for International Studies.

This article appeared in the most recent edition of the East Asia Forum Quarterly, ‘Leadership in the region‘.