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#4816, 21 January 2015
IPCS Forecast: China in 2015
Teshu Singh
Senior Research Officer, CRP, IPCS

The year 2014 can be considered the new leadership’s first year of functioning’. As predicted in early 2014 (China 2013: New Leadership), the foregoing year saw a more assertive China at the global level. Towards the end of the year, the central conference on work relating to foreign affairs was held in Beijing that gave a bird’s eye view of China’s foreign policy in the coming year.

Domestic Politics
For the first time, a lot of importance was given to Deng Xiaoping and his style of functioning. The national Chinese newspaper People’s Daily carried a special section on the leader. There has been constant comparison between both the leaders. There has also been conjecture on whether Xi would take the legacy of Deng Xiaoping forward (Contemporary Foreign Policy of China: Legacy of Deng Xiaoping). 

Last year saw a very tough stance on the issue of corruption; reforms were pushed ahead and many important reform measures were introduced. Rule of law was the central theme of the fourth plenary session of the eighteenth party congress. According to a report, 1.82 lakh officials at various levels were prosecuted for corruption, 32 leaders who rank at the level of vice minister were arrested and investigations started against them. The issue of corruption will be dealt with more strictly. As Xi Jinping mentioned in his New Year speech, efforts to advance reform and rule of law are “a bird's two wings."

The issue of Uighur terrorism in Xinjiang province will occupy the centre stage at the domestic level and the government will introduce a lot of affirmative action. Already the Chinese government has made some effort to defuse tension by promoting inter ethnic marriages in August 2014.

China and its Global projection
In the quest for the China Dream - national rejuvenation - China aspires to be a global power. According to IMF, in 2014, China surpassed the US in term of GDP based on PPP. Among many bilateral relationships; the most important for China is the Sino-US relationship. The Strategic and Economic Dialogue held (S&ED) has established precedence to the world that two countries with different cultural and social system can cooperate on diverse areas. In the coming year China will engage with the US in a more pragmatic manner to work for mutual benefit and work towards a Bilateral Investment Treaty (US-China Strategic and Economic Dialogue: Lessons for India).

China is playing a very active role in multilateral organisations like the BRICS, SCO and APEC. Chinese foreign policy has become less personalised and more institutionalised, and more specifically, it is indicative of China’s growing interest in ‘multilateral diplomacy’ and ‘peripheral diplomacy’. During the 2014 BRICS Summit, China announced the establishment of the New Development Bank (NBD) with its headquarters in Shanghai and the Contingent Reserve Arrangements (CRA) (BRICS: China End Game).

Taking forward the developments of the BRICS summit, China launched the Asian Infrastructure Investment Bank (AIIB). The AIIB is a step towards projecting China as responsible regional player and subsequently a global power. It the Chinese alternative to the Trans Pacific Partnership (TPP) led by the US and Japan and an answer to the US ‘pivot to Asia’. It is an endeavour by China to discourage Asian countries to seek help from the US or US-led institutions, thereby restricting its entry into Asia. The bank will also highlight China’s significant experience in infrastructure financing, and indeed, multilateral development banking in general (China and the Asian Infrastructure Investment Bank: A New Regional Order). The bank will be operational in 2015.

APEC 2014 was the biggest event hosted by Xi Jinping after assuming power with the agenda of trade. China seeks to play a greater role in the region as America has in regard to Europe; a leader that seeks to protect the region from outside without any alliance and pressure. China used the available opportunities at the APEC meeting to project its global leadership by managing its conflicts and deepening its economic reform. One of the major developments of the APEC summit were the bilateral meetings of China President Xi Jinping with the US President Barack Obama and the Japanese Prime Minister Shinzo Abe. Amidst growing confusion over the ADIZ and the East China Sea dispute, both counterparts met for the first time during the summit. Yet another development that took place summit was the new term coined by Xi Jinping of the ‘Asia Pacific Dream’. China also proposed the free trade area of Asia Pacific (FTAAP) to promote Asia Pacific cooperation. Since China is already giving so much emphasis to the region the year in focus is going to unfold new strategies for the fructification of this ‘Asia Pacific Dream’.

Energy Security will also be one of the prime objectives of the government this year. According to the General Administration of Customs (GAC), China’s over sea oil purchase has already increased 9.5 per cent year on year to 308 million tonnes. China is looking forward to jointly build a new platform of China-Community of Latin American and Caribbean States (CELAC) cooperation from a long-term and strategic perspective, and to develop a new comprehensive cooperative partnership. Earlier as soon as Xi Jinping assumed power he toured Latin American and Caribbean countries (China and Latin America: Quest for Energy Security).

China and its Neighbourhood Policy
China has been trying hard to improve relations with all neighbouring countries. It has been quite intrepid in its neighbourhood policy by launching the AIIB and implementing the Silk Road Belt initiative robustly.

Sino-Indian relations did not see much change except for Xi Jinping’s visit to India. During his visit sixteen MOUs were signed and China committed to invest USD 20 billion in the next five years. At the same time as the Premier’s visits a skirmish occurred along the Sino-Indian Border in the Chumur sector in Ladakh. This was rather a negative development in the bilateral relationship. However, new/big developments might follow this year when Narendra Modi will visit China.

Afghanistan is China’s neighbour and any development in the country is bound to affect internal dynamics in China. Given that Afghanistan is a landlocked country and shares a border with China, Beijing will engage with Kabul to secure its western periphery, especially the Xinjiang region. The region assumes more importance for China as it forms an important link in the ‘New Silk Road’ and is interconnected with China’s Western Development Strategy (WDS). China is interested in the economic reconstruction of Afghanistan as much as it caters to Beijing's foreign economic policy (China's Endgame in Afghanistan).

In the Indian Ocean Region (IOR), China is trying make all efforts to make it presence. China will work further to implement its Maritime Silk Road strategy in the region. It is also part of China’s larger strategy to develop extensive transport networks - roads, railway lines, ports and energy corridors. It would further cater to somewhat resolving China’s ‘Malacca Dilemma’ and help augment the ‘String of Pearls’ strategy. With the US’s ‘pivot to Asia’, China is concerned about its aspiration to become a global power. Additionally, it is not a South Asian power but seeks a presence in the region. However, in the coming year with the change in government in Sri Lanka the MSR might see some hiccups.

China installed an oil rig in the disputed South China Sea (SCS). The installation of the rig appears to be a well calibrated move. Evidently, China has adopted a ‘salami slicing’ (step-by-step approach) in the SCS. It took over Mischief Reef from the Philippines in 1995; established Sansha city on the Yongxing Island/Woody Island a few kilometres from its Hainan Province; cut the cables of the Vietnamese vessels; occupied Scarborough Shoal; and is now constructing a runway on Johnson South Reef. The rig appears to be their next move in the region. Later in the month of December, the Chinese foreign ministry released a position paper of the government on the matter of jurisdiction in the South China Sea arbitration initiated by the Republic of the Philippines ( China's'Salami Slicing': What's Next). However, in the near-term, China will be more aggressive in the region with high probability of declaring an ADIZ, and might complete the construction of its second airstrip on the SCS by this year.

China and its Special Administrative Region
The later part of the year saw the pro-democracy protest in Hong Kong. It drew world attention towards China’s Special Administrative Regions (SAR) - Hong Kong and Macau - that were reunified with the mainland in 1997 and 1999 respectively. Both SARs are a part of China under a unique system famously known as ‘one country, two systems’. Today, it is economically prosperous with limited universal suffrage only in district council elections and parts of the legislative council. China’s endgame in Hong Kong is to reap the benefits of its economy with a firm control on its state apparatus (China's End Game in Hong Kong). This development will further effect China’s strategy towards Taiwan as well. China will be extra conscious in its policy towards Taiwan.

China will be even more proactive in pursuing a friendly and good-neighbourly policy toward its neighbouring countries and its Belt and Road initiatives will be also quicken. Chinese compromise on issues of core interest seems bleak and this may in turn antagonise its neighbour especially in its peripheral regions. Further, an editorial in the Xinhuanet, “Not a ‘Chinese Century’, but a less Westernised world” has elucidated that in the coming year, China is going to be more proactive without antagonising any other powers, big or small.

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