Indo-Pacific is rigorous test of China's foreign policy

China’s pursuit of trade partnerships is at odds with its high-octane rhetoric as it seeks to respond to the West’s Indo-Pacific strategy.

Expert comment Updated 22 October 2021 Published 26 April 2021 2 minute READ

With its conceptual ambiguity, ‘Indo-Pacific’ is the latest geopolitical buzzword between the United States and its allies. Behind its increased use is an overt aim to curb China’s growing economic, political, and military influence between the Pacific and Indian Oceans.

Beijing’s foreign policy deliberation is being rigorously tested with this increasing tilt by the West towards the Indo-Pacific. For China, this tilt complicates the already erratic relations between Beijing and Taipei, escalates the sabre-rattling in the South China Sea, and disrupts its flagship Belt and Road Initiative, which the country has invested heavily in.

The reality is that if Beijing doubles down on its diplomatic war of words, it will not help fulfil China’s own age-old foreign affairs priority of creating a stable external environment to foster its domestic economic development

But the growing geopolitical significance of the region goes well beyond China’s relations with liberal democracies and regional economies. It exposes a permanent contradiction in Beijing’s foreign policy between pursuing economic growth with trade partners and simultaneously conducting combative diplomacy with many countries.

The reality is that if Beijing doubles down on its diplomatic war of words, it will not help fulfil China’s own age-old foreign affairs priority of creating a stable external environment to foster its domestic economic development. This conservative maxim was advocated by Deng Xiaoping but it should remain a mantra for Beijing in handling foreign affairs today.

Dual circulation strategy

In response to the COVID-19 pandemic and a tougher international environment, Beijing proposed the new dual circulation strategy to promote domestic consumption. A central part of this strategy is to boost the domestic economy’s ability to power itself. But the key word remains ‘dual’.

As the signing of the Regional Comprehensive Economic Partnership (RCEP) shows, Beijing’s economic strategy is not isolationist – particularly not to isolate the many involved countries of the Indo-Pacific. It also signals a diplomatic scaling back to return to Beijing’s ‘periphery diplomacy’ with a focus on its immediate neighbours, and gives Beijing further economic and political incentives to pivot foreign policy priorities towards its neighbours and away from Eastern Europe and Latin America.

China should not automatically assume that growth through gigantic infrastructure investments – the model that drove its own economic miracle – is a panacea applicable to other Asian economies

President Xi Jinping’s announcement that China will ‘favourably consider’ joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a trade agreement originally proposed by the US but from which Donald Trump withdrew – is a further step towards narrowing its priorities and creating greater economic interdependence with its Indo-Pacific neighbours.

China is embedded firmly in the regional trading system and is a larger trading partner than the US for every country in the Indo-Pacific except Bhutan. Across the region, countries have to strike a cautious balance between a maintenance of beneficial security ties with the US and close trading partnerships with China.

Putting trade and economic partnerships aside, Beijing’s biggest challenge in responding to the West’s Indo-Pacific strategy remains the heightened uncertainty of Taiwan. Both the incumbent Democratic Progressive Party and the Kuomintang, which has traditionally maintained closer relations with Beijing, have abandoned their ‘Beijing-friendly’ policy stance.

Instead of entertaining the idea of military intervention, Beijing needs to find ways to appeal to the increasingly diverse island, which has become less attracted to the allure of greater integration.

The Indo-Pacific strategy also reignites unrest in the South China Sea. There is growing public concern about China’s military might, even though many ASEAN members see some positive areas in China’s economic strength. Establishing stronger commercial ties to open up more opportunities for countries in the region to tap into China’s immense economy would deflate tensions raised by the US and its allies.

Money and manpower for the region

China is also being forced to rethink its gigantic Belt and Road Initiative as an Indo-Pacific strategy to gain geopolitical currency. Much money and manpower has been showered on the region under this flagship initiative. Beijing is fully aware that it can only prosper if its regional partners prosper, and it can only achieve resource security and border stability if its southern and western neighbours cease to fight over land and resources.

Beijing has realised that its passion for the Belt and Road may not be shared by some of its neighbours, partly because the programme includes serious risks. China should not automatically assume that growth through gigantic infrastructure investments – the model that drove its own economic miracle – is a panacea applicable to other Asian economies. Nor should it relentlessly seek recognition from its Indo-Pacific neighbours for its foreign investments and help.

Instead, renewed effort should be given to building sustainable infrastructure and to offer accessible and scientifically proven COVID-19 vaccines affordably, which can create long-lasting economic and humanitarian benefits in the region. This is Beijing’s strongest suit if it is to win hearts and minds in the region.

As it is, Beijing’s foreign policy today combines a strange mix of high-octane rhetoric with pragmatism and patience. To respond to the Indo-Pacific strategy and to resolve this contradiction in its foreign policy, China has a choice. It can nurse a brooding sense of fury and resentment, or it can rise above it by injecting a dose of realism in its foreign policy – and help show its Indo-Pacific neighbours a way out of this humanitarian and economic calamity.

This article was originally published by the South China Morning Post.