The CPC is omnipresent in decision-making across China’s political apparatus. The State Council and the seven-member Standing Committee of the CPC Politburo provide the strategic overview and long-term policy goals of Beijing’s external affairs. However, individual policy measures largely fall under the remit of various central government institutions, SOEs and provincial-level governments.
China’s approach to foreign policy became increasingly pluralistic after Deng Xiaoping re-emerged as the country’s paramount leader in 1978. Deng’s administration introduced landmark economic reforms that led to decentralization across all types of policymaking, at the national and provincial levels. Consequently, no single central government institution has total ownership of decision-making in foreign affairs. In striving for greater political influence, these stakeholders use their expertise and resources to gain access to the Politburo.
Seeking consensus remains one of the key features of decision-making across the senior leadership of the CPC as well as among government institutions. Although ‘consensus’ is often an illusion, the negotiation process provides opportunities for existing and new actors – namely vested interest groups – to influence the opinions of the most senior leaders within the Party. Vested interest groups have long played a crucial role in decision-making within Beijing’s political apparatus. They provide relevant inputs and more specialized perspectives in all policy domains ranging from land reform to US–China relations. These groups consist of central government institutions, SOEs and provincial-level governments. Many of them have sophisticated advocacy capacities to shape policy agendas.
While the guiding principle of governance might be very different in a democratic regime, vested interest groups are a ubiquitous feature of governments, irrespective of the political system. China is no exception.
There are many institutions and stakeholders involved in the formation and implementation of Beijing’s foreign policy. Influential players engage in fierce competition and advocate their preferred policies and departmental or commercial interests. This approach has much in common with practices in many Western liberal democracies. Rather than reflecting a well-calculated and immaculately executed masterplan, policy outcomes in Beijing are often a direct result of bargaining among central bureaucracies and provincial-level governments.
The BRI, President Xi’s flagship initiative, is a notable example of how vague and broad policy guidance can lead to a ‘land rush’ among vested interests in the Chinese political system. The long-term project is an incredibly ambitious, multi-billion-dollar venture, which comprises physical and digital infrastructure-building across 120 countries.
President Xi’s focus and backing of the BRI has generated two pivotal, as yet unanswered, questions for the Chinese government: Which ministry or government agency has overall responsibility for making final decisions on BRI investments? What key factors determine that a particular project is part of the initiative?
A document published by the State Council notes that the National Development and Reform Commission (NDRC) leads the overall coordination efforts to deliver the BRI, and that executive responsibility is jointly shared by the Ministry of Commerce (MOFCOM), the Ministry of Finance and the Ministry of Foreign Affairs. Following a long-standing Party tradition, a consulting body known as a ‘small leading group’ was established to form consensus among different actors and to implement BRI policies. Comprised of senior policymakers, this group tackles difficult and outstanding issues when disagreements arise and final judgments are required. The group meets quarterly in the above-mentioned ministries, which share decision-making power and responsibility.
Beyond these four ministries and the small leading group, 15 other institutions and agencies in Beijing’s political apparatus contribute to final decisions on projects deemed part of the BRI. However, consensus is difficult to achieve. For example, it is almost impossible to expect the Ministry of Finance and the Ministry of Transport to view the selection criteria of high-speed rail projects through the same lens. The Ministry of Finance seeks a sound return on investments and has an aversion to recipient countries defaulting on loans and credit, whereas the Ministry of Transport prioritizes the speed at which the infrastructure projects can be completed.
Beijing’s efforts to encourage prospective overseas financial and political investments as part of the BRI are hampered by its long-standing bureaucratic opacity. Foreign governments and individual investors still question who ultimately underwrites this initiative.
Multiple ministries shape the policy agenda due to the Party leadership’s limited capacity: it has neither the time nor expertise to make swift judgments on a range of foreign affairs issues. The Party leadership and the CPC Central Foreign Affairs Commission, headed by veteran diplomat Yang Jiechi, meet periodically and almost never resolve every single agenda item.
Standing Committee members often seek advice from agencies and ministries before setting the actual foreign policy agenda. In this way, relevant government institutions are presented with greater opportunities and more channels to shape China’s foreign affairs priorities.
The institutionalization and professionalization of foreign policy formation does not undermine the ultimate decision-making power at the very top of Beijing’s leadership. The Standing Committee still decides on the matters of vital importance. More crucially, its seven members deliberate on critical decisions relating to national sovereignty, territorial integrity and the potential dispatch of the People’s Liberation Army.
The institutionalization and professionalization of foreign policy formation does not undermine the ultimate decision-making power at the very top of Beijing’s leadership. The Standing Committee of the Politburo still decides on the matters of vital importance.
Yet the wider 25-member Politburo only decides on matters within the remit of ‘high politics’ – such as national sovereignty and military activity. The policy agenda in ‘low politics’ areas – such as climate change, international aid and trade negotiations – is ranked by the Politburo according to each area’s perceived importance at the time. The higher an issue ranks, the less time it will take for Politburo members to determine related policy. Crucially, the perceived importance of each issue will change constantly and align with the leadership’s policy priorities at home.
For example, during the Trump administration, Chinese Vice-premier Liu He oversaw the US–China phase one trade negotiation. As trade and tariffs have become less of a priority to both China and the US under the Biden administration, the negotiation is once again the responsibility of the vice-minister of commerce.
Another notable example is the establishment of China International Development Cooperation Agency (CIDCA) in 2018. Since 2001, China has become a major financial provider of international assistance, offering distinctly different terms and conditions compared to those of advanced economies and the Washington consensus-led multilateral financial institutions. The creation of CIDCA, which aims to improve policy coordination on development assistance among various ministries, reflects the increasing attention devoted to development assistance on China’s foreign policy agenda.
Bureaucratic disputes frequently erupt over development assistance between MOFCOM, as the executor of development projects, and the Ministry of Foreign Affairs, the chief implementer of Beijing’s foreign policy. Each institution adopts its own respective viewpoints when proposing new development assistance projects or loans. MOFCOM prefers to combine business promotion on behalf of Chinese SOEs, whereas the Ministry of Foreign Affairs focuses on strengthening bilateral ties or extending China’s influence in multilateral organizations. Neither ministry has the power to veto the other’s proposals.
Scholars disagree on the power parity and level of influence between these two ministries when it comes to formulating China’s development assistance policies. MOFCOM and the Ministry of Foreign Affairs appear to be equally influential in determining policy changes with both country- and sector-specific cases, judging by the recent developments of the BRI and the Forum on China–Africa Cooperation (FOCAC) – two key policy platforms for Beijing’s development policy agenda.
Besides setting broad policy priorities, the Politburo can establish new government departments or redraw policy portfolios and budgetary power among existing institutions. Yet bureaucratic shake-ups do not happen frequently and such restructuring mostly aligns with shifts in policy priorities.
For example, Made in China (MIC) 2025, a scientific and industrial policy developed by the Ministry of Science and Technology, has had a significant impact on Beijing’s foreign policy agenda. MIC 2025 aims to holistically upgrade manufacturing capability and to make China a self-reliant, global champion in 10 core strategic innovation sectors. The initiative raised eyebrows in both the US and the European Union.
MIC 2025 was initially proposed by the Ministry of Industry and Information Technology and the Chinese Academy of Engineering. It was adopted in Beijing’s 13th Five-Year Plan. The initiative was later formally developed jointly by the NDRC and the Ministry of Industry and Information Technology, with some input from the Ministry of Industry and Information Technology as well as other central ministries. Despite initiating the plan, under the directive of the Politburo and the State Council, the Ministry of Information and Industries had to share policy responsibilities and budgetary powers with the NDRC and the Ministry of Science and Technology.
The Party grants both authority and budgetary powers to newly created institutions to implement policies. Certain policy domains have only recently become priorities in China’s overall foreign policy agenda. For example, two government agencies share the policy remit of carbon emission reduction and developing renewable energy. When ministries share responsibility for certain policies, they engage in a bargaining process that ‘involves negotiation over resources among units that effectively have mutual veto power’.
Changes in the portfolio of the NDRC, a domestic policy-focused institution, demonstrate the shifts in China’s foreign policy agenda. The State Council’s 2018 bureaucratic shake-up reinforced the NDRC’s authority. The NDRC is now seen as the most influential institution both in China’s central government apparatus and in overall economic policy planning. On climate issues, the NDRC and the Ministry of Environment are often at odds with one other. While the former favours quota distribution on renewable energy usage to meet emission targets, the latter prefers to have a total emissions reduction across all Chinese manufacturing.
The NDRC now provides input into almost every key aspect of China’s foreign affairs agenda: the BRI, climate diplomacy and trade and investment treaty negotiations. Yet the Politburo has restructured the NDRC three times over the last 15 years to limit its power, in an attempt to minimize complaints and disputes from other central government institutions.
Since China’s admission to the World Trade Organization (WTO) in 2001, much of its foreign policy decision-making has required expertise in financial governance, technology standard-setting and climate change diplomacy – areas in which most Chinese diplomats in the Ministry of Foreign Affairs are traditionally unfamiliar. To fill this knowledge gap, specialized institutions have formed to offer expertise and advice to the top leadership. These institutions shape policy formulation and implementation, working outside the conventional channels of foreign policymaking in Beijing.
The growing influence of the State Oceanic Administration is an example of a government body that has expanded its influence and remit through its expertise and skill base. Originally formed as a research institute to serve China’s Antarctica explorations, the agency has risen to prominence, from shaping Beijing’s maritime security strategy to addressing domestic energy policy. China’s increasingly hostile approach over the South China Sea and the East China Sea has offered the State Oceanic Administration a perfect opportunity to gain influence. It provides the Politburo with unique scientific expertise on maritime security that other institutions with a foreign affairs portfolio do not have, increasing its influence among the top leadership.
