Beijing briefing: China goes for growth in Global South

Due to worsening Sino-US relations and tightening EU markets, Beijing is hoping for a better reception in the Middle East, Africa and Latin America, writes Yu Jie.

The World Today
3 minute READ

Dr Yu Jie

Senior Research Fellow on China, Asia-Pacific Programme

The Chinese Communist Party National Congress in October 2022 offered an intriguing hint that Beijing’s management of its foreign affairs was undergoing a change of direction.

In his major speech, President Xi Jinping abandoned any mention of a ‘new type of great power relations’, a concept he had used repeatedly in his past two congressional updates when referring to his preferred approach to relations with the American-led West. The omission shows that Beijing has decided its fraught relationship with developed nations is here to stay, with little prospect of improvement.

Worsening Sino-US relations and the tightening of access to American and European markets for Chinese companies have prompted China’s leaders to reconfigure their approach to foreign affairs and look elsewhere for sources of economic growth. As a result, Beijing has speeded up its diplomatic charm offensive in Africa, Latin America and the Middle East.

The three Gs

Xi has stressed that China should further develop its ties with the Global South through the Global Development Initiative, the Global Security Initiative together with the most recent addition, the Global Civilization Initiative.

The three complementary ‘Gs’ combine in the Community of Common Destiny which Xi is proffering as an alternative to the West’s rules-based international order. The aim is to reshape the global governance agenda in multilateral forums and to project Beijing’s influence on to the developing world. Yet, large parts of the globe are still trying to work out what China’s latest moves entail.

The international community was taken by surprise when Beijing managed to broker peaceful relations between long-term diplomatic rivals Iran and Saudi Arabia. But while China has traditionally focused on economic engagement in the Middle East, more recently it has shown a greater willingness to engage in regional conflict mediation.

The normalization agreement reached between Riyadh and Tehran in March 2023 reflects China’s growing involvement in regional politics, which is enhanced by the perception in the Middle East that China is neutral and a large enough power to hold Iran and Saudi Arabia to account if they fail to honour the agreement. As China’s engagement with the Middle East increases, US involvement is seen to be pulling back.

Beijing already wielded considerable influence in Iran as a major investor and an indispensable economic partner. In 2021, Iran and China signed a 25-year Cooperation Programme under which China is scheduled to invest up to $400 billion in the Iranian economy in return for a guaranteed supply of oil. This came at a time when Iran was feeling the effects of western sanctions. With Riyadh, too, experiencing a febrile relationship with Washington over its human rights record and refusal to stabilize oil prices, China took the opportunity to consolidate its position in the region.

Uneasy peace

But the task of peacemaker is onerous and will require diplomatic finesse, real regional expertise and greater responsibility if Beijing is to sustain such an ‘uneasy peace’. Whether China can become a substantive regional player in the longer term remains to seen.

In the wider context of the Global South, the economic consequences of the Covid pandemic and Russia’s invasion of Ukraine have undermined the economic recovery of developing countries. At the same time, as China makes a renewed push to strengthen its ties with them, countries in the South do not see the war in Ukraine in the same stark moral terms as the West. An emphasis on energy and food security in China’s recent position paper on Ukraine may have struck a chord with developing countries reeling from the war’s negative economic effects.

China would like to see an enlarged BRICS group become a China-friendly hub

At the same time, Beijing is proposing an expansion of the BRICS group, comprising Brazil, Russia, India, China and South Africa − once viewed as a loose association of disparate emerging economies. Beijing sees itself as the presumed leader of the group and would like to see an enlarged membership transform it into a China-friendly club … with the exception of India.

Despite disagreements among BRICS members, they have been seen to have more in common than the western strategic community expected and all see an increase in multipolarity as something desirable. As a result, all are expected to play a more active role in determining the current world order as well as increasing their leverage to deal with the US.

To sustain all these new initiatives aimed at the Global South, China will have to maintain a suitable level of economic growth and show diplomatic sophistication. Amid slower growth and renewed pressure from the West, China’s ability to deliver these flagship initiatives will be tested.