Hello and welcome to What China Wants.
I’ve been writing this newsletter for a year and a half now and enjoyed every minute. During that time, the readership has ballooned from a few loyal followers to people all over the world, from academics and politicians to businesses people and students.
Aside from wanting to know more about China, something many of this disparate group has in common is an interest in listening to WCW too. If that includes you, then I have good news. Next week, should the technology gods allow, we’ll be launching the first episode of the What China Wants podcast.
I’ll be joined in this by my friend and colleague Stewart Paterson, one of the world’s leading experts on the economy of China and the author of the book China, Trade, and Power. Each week we will discuss a different China-related topic and invite guests of all persuasions to help us do so. We have an exciting list lined up, and hope you’ll supply even more ideas for us to discuss.
In the meantime, thanks again for reading, and do consider liking, commenting, and sharing. You’ll hear from me next week.
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Some in the West cling to the hope that Xi Jinping, the declared best friend of Vladimir Putin, is the only man who can successfully intervene to stop the bloodshed in Ukraine. But any hope that Xi would do anything to help the West in its stance was evaporated recently by a little-reported speech by the Chinese premier.
Speaking to the Boao Forum for Asia, a non-profit forum for regional Asian leaders, Xi effectively rejected Western calls to take sides against Russia by highlighting China’s opposition to unilateralism, group politics, and bloc confrontation. He reiterated China’s opposition of the “wanton use” of unilateral sanctions and long-arm jurisdiction, implying the “indiscriminate” sanctions imposed on Russia by the West.
So far, so normal: China has long argued against Western action that might hurt its interests, which targeting the resources-filled Russia certainly does.
Instead, what was different was Xi proposing what he termed a Global Security Initiative (GSI). This is the latest in a series of international frameworks that China has announced, such as the Belt and Road Initiative, which serve to project China’s interests abroad.
In many ways this was an extraordinary announcement. Beijing has long been wary of being too public about its overseas military reach, content to acknowledge just one official overseas base, in Djibouti. But with the GSI announcement, and the signing of a security pact with the Solomon Islands a few weeks ago, the People’s Republic is beginning to inflate its military profile. Not that it hasn’t been busy behind the scenes. Across the developing world, from Namibia and Ethiopia to Cambodia and Indonesia, China has been building these countries’ defence infrastructure and conducting joint military training, using these connections to open the country up to other interaction, especially economic. Indeed, Xi specifically mentioned China’s Global Development Initiative in his speech and linked that to both security and stability. As he said, "Stability brings a country prosperity while instability leads a country to poverty”.
There are two key takeaways from Xi’s announcement. First is that China is now offering a framework for security alongside the economic and development assistance it gives mainly to the developing world. This gives them yet another tool to increase their international influence.
Second, is that the GSI is very likely to be part of the preparations being made by Beijing for the coming confrontation with the West, which we call The Great Split. That Beijing thinks this was underlined by an article published in March by the vice-chairman of the Public Policy Research Center of the Counselor’s Office of the State Council, an official Chinese government think tank. The author, Hu Wei, declared that the Russian invasion of Ukraine will bring the West further together and therefore empower it, with Washington’s role in the world enhanced as a result. China will therefore feel “more isolated” from both Europe and Asian powers like Japan and South Korea, a feeling that will be strengthened by the expected announcement of a new defence pact between Tokyo and London.
As I have written about before, students of the country’s history will tell you that China feeling encircled and isolated tends to stimulate talk of breaking the encirclement. One way to do so is to take back Taiwan and thus secure access to the outer Pacific, which is yet another reason why reunification with the island is very much on the cards.
China’s economic preparations for the Great Split were also highlighted this week when Ping An, a major Chinese company, used its position as a major shareholder in HSBC to call for the British bank’s breakup. According to the proposal, HSBC should be split into an Asian (and therefore “China friendly”) entity, and a Western one.
Although Ping An’s move was rejected, it served to highlight the fears held by many that economic entities with a foot in both camps will not be able to survive the forthcoming turmoil. There will be similar strains made on political entities too.
As Hu Wei intimated, the war in Ukraine is doing much to cleave the world apart. The GSI, along with the Belt and Road, the internationalisation of the RMB, and countless other ongoing initiatives, are Beijing’s way of capturing a zone of influence worldwide to allow it to cushion the blow it expects to receive as and when it moves on Taiwan.
By doing so, China is extending its influence into countries that have until recently been friends and allies of the West. If London, Washington, Canberra, and Brussels want to keep the world on their side ahead of the Great Split then more action is needed (and now) to counter Beijing’s moves. Otherwise as and when the chasm yawns and governments are forced to choose sides, there might be a few surprising nations standing with China.