C3S Paper No. 0083/ 2015
There are signs that President Xi Jinping of China has begun a process to transform the direction of the country’s foreign policy course by beginning to focus on economic interests. Does this mean a change in the country’s hitherto followed assertive core interest-based external line? No definite answer to this question can be given at the moment, but appearing meaningful in this regard is Xi Jinping’s declaration (Bo Ao Forum, March 2015) that his country is ready to sign friendship treaties with neighbors. Hypothetically speaking, the neighbors of the PRC who want to benefit from close economic ties with China, but at the same time feel compulsions to worry about Beijing’s aggressive push of its territorial claims, will feel relieved if China tones down its assertiveness abroad at action levels. In reality however the situation is different; consider creation of artificial islands in South China by sea by China with an eye on gaining strategic superiority vis-à-vis other claimants. This being so, undoubtedly one has to wait further for a full picture ; much would depend on the nature of future domestic and foreign policy developments in China. In the case of India, it would be beneficial for it to probe the Chinese new foreign policy thinking utilizing the opportunity of the impending visit to Beijing by its Prime Minister. In particular, it may look for fresh Chinese indicators to their readiness to be more flexible on bilateral trade imbalance issue and be more accommodative on the border problem, including on sticking points concerning the issues of stapled visas to Indians and Chinese intrusions across the Indian border.
The outside world is already familiar with the two main contributing factors to the post-2009 international assertiveness of the People’s Republic of China (PRC) – (i) the confidence gained through its ability to achieve a sustained growth leading to a build-up of the country’s ‘comprehensive national strength’ and (ii) the conviction that an opportunity has arisen for itself to increase its influence globally as the world balance of power shifts from the West to East and a multi-polar world gradually emerges. Feeling the necessity to provide a theoretical frame work for such assertiveness, the PRC introduced a core interest concept which had three components –preservation of basic state system and national security, protection of national sovereignty and territorial integrity and the continued stable development of economy and society (Dai Bingguo, US-China Strategic and Economic Dialogue, July 2009). The concept became the cornerstone of China’s foreign policy since that year.
The demands on China imposed by this ‘core interest’-based foreign policy course for making no compromises on all issues concerning the country’s territorial sovereignty, are resulting in the PRC’s territorial assertiveness which is giving rise to fears among the neighboring nations about the intentions of the former. In this regard, what the Chinese Communist Party (CCP) leader Xi Jinping has said (Speech delivered at a party Politburo Study session convened on 28 January 2013) are important. He declared that “China will never pursue its development at the cost of sacrificing interests of other countries …. We will never give up our legitimate rights and will never sacrifice our national core interests. No country should presume that we will engage in trade involving our core interests or that we will swallow the ‘bitter fruit’ of harming our sovereignty, security or development interests”. The 18th CCP Congress document (November 2012) echoed the same spirit. It proclaimed that China’s ‘banner is to forge a win-win international cooperation’; at the same time it laid emphasis on making ‘no compromises’ on issues concerning ‘national sovereignty and security of core interests’. Most significant has been the document’s clarification that “the two aspects are pillars of Chinese diplomacy and do not conflict with each other” (People’s Daily, 16 November 2013); the mention in the document that China “will never yield to outside pressure” and “will protect legitimate rights and interests overseas’, was noticed for the first time in a CCP congress material.
Under the continuing core interest-based foreign policy approach, China, as expected, is adopting an assertive line in its external relations. It has set aside veteran leader Deng Xiaoping’s foreign policy position of ‘hiding one’s capacities and biding one’s time’ as symbolized in the current stress on China playing an ‘ international role of a responsible, big country’ (Chinese Foreign Minister, Beijing, 8.3.2014). The PRC is intensifying rivalry with the US, increasing confrontation with Japan and displaying toughness on territorial and maritime issues. Signs confirming China’s assertiveness include the repeated stress on national rejuvenation, allotment to the army of the aim of winning a regional war in the age of information technology and steps like the declaration of East China Sea Air Defence Identification Zone and construction on reefs in the disputed Spratly islands in South China Sea to create artificial islands with facilities that could potentially be for military use, including an air strip.
Opinions being expressed of late by influential Chinese scholars, on the other hand, point to a different trend. They are signaling that the Xi Jinping leadership has carried out a strategic policy review which has facilitated adoption of a decision in favour of shifting the focus to economic interests in external ties. According to them, there is already a trend to this effect since early summer of 2013.  Confirming it, known Sinologists in the West say  that the shift is due to the perception in China now that economic recession is a bigger challenge than external threats. They reveal that a consensus has been reached by the Xi administration on what should be the theoretical foundation of the current major contradictions in the Chinese society. Identifying the “Four Comprehensives” concept introduced by Xi Jinping in December 2014 (“comprehensively, build a moderately prosperous society, strengthen reforms, establish rule of law and set up party that have defined”) as such foundation, they have observed that the leader, unlike his predecessors, seems to have realized that the central task of development can be achieved only if changes could be brought into the structure of international economic and political order. Also according to them, President Xi JInping has redefined and expanded the function of Chinese diplomacy and that he will attempt to alter some of the foreign policy processes and power relationship that have defined the political, military, and economic environment in the Asia-Pacific region. Put together, all the opinions seem to have valid grounds considering China’s actions and statements being witnessed since 2013, as listed below:
Adoption of the foreign policy formulation of “New Type of Great Power Relations”: Promoted by the PRC President Xi Jinping in his meetings with US counterpart Barack Obama in June 2013, July 2014 and November 2014, it primarily addresses Sino-US ties. It had three points – major powers should have no conflict or confrontation, should emphasize dialogue and should treat each other’s strategic intentions objectively; they should have mutual respect, including for each other’s core interests and major concerns; and they should conduct mutually beneficial cooperation, abandon the zero-sum game mentality and advance areas of mutual interest ,
Unveiling of the “Community of Shared Destiny” concept (figured in the address of the CCP chief Xi Jinping at the Central Conference on Work Relating to Foreign Affairs, held in Beijing in November 2014). Providing for realizing Asia’s economic potential and durable security, it stipulated that community of destiny will be based on deep economic integration, but going beyond trade. It will be a vision of a political and security community in which economically integrated countries in the region support and defend one another from outside threats and intruders, as well as manage internal threats together through collaborative and cooperative mechanisms ,
Top foreign policy priority to ties with periphery: This has happened in the conference mentioned above: the listed order was periphery, Great Powers and Developing countries. The priority shift reflected Beijing’s assessment that relations with Asian nations and with rising powers are becoming more and more important to it in terms of economy and security, than ties with the developed countries. Confirming the new Chinese thinking is Xi Jinping’s declaration that “Asians have the capacity to manage security in Asia by themselves”. Experts assess that the first priority to periphery reflect the Chinese perceived long-term economic and geo-political trends. China’s Vice Foreign Minister stated in April 2014 that the country’s trade with East and Southeast Asia totaled “$1.4 trillion, more than China’s trade with the United States and European Union combined.” He noted “half of China’s top ten trade partners are in Asia.” Moreover, China realizes it must secure its geostrategic flanks to prepare the country’s ascent into the upper echelons of global power,
Promulgation of a mega ‘ one belt, one road’ initiative to establish regional connectivity: A Silk Road Economic Belt is to be established along the Eurasia, land corridor from the Pacific coast to the Baltic Sea, and the 21st century Maritime Silk Road connecting Asia and Europe through sea route,
Creation of new multilateral institutions: To be set up are the New Development Bank (formerly referred to as the BRICS Development Bank), the Asian Infrastructure Investment Bank, and the Contingency Reserve Arrangement.
Beijing’s proposal for Free Trade Area of the Asia-Pacific
Repeated references to the term ‘peaceful development: China has stated that the operative term for its foreign policy in 2015 will be ‘one focus (promoting the “One Belt, One Road” initiatives) and two main themes’ (peace and development)- China’s Foreign Minister Wang Yi, Global Times, 9.3.2015,
Xi’s announcement that China is ready to sign friendship treaties with neighbors : Made during the address of Xi JInping at Bo Ao Forum on 28.3.15,
Continuing Stress on balancing security and development: The CCP Politburo meeting on National security (January 2015) alerted China on ‘un- predictable and unprecedented dangers’ facing it and declared that while China would seek to ensure its national interests, will promote common prosperity of all countries. For this, there would be three focal points – Great Power Relations, security environment in the immediate neighborhood and cooperation among developing countries, 
Treating Economic Recession as main challenge: The Chinese scholars have said that external factors like conflicts with Japan, the US and neighboring countries are still manageable and will not subvert external environment if they remain under control. Security has not yet surpassed development as priority for party and government. While acknowledging that sovereignty is vital for the survival of China’s political system, they have felt that its place in the order of national strategic priorities should be pushed back due to a lack of pressing external threats as “political and social unrest generated by an economic recession” is the greater danger now(Xiandai Guoji Guanxi, January 2013, footnote No.2),
Increased level of Sino-US cooperation on security issues: prominent cases are those relating to North Korea, Syria and Iran,
Some thaw in China-Japan Relations: ‘Four Point’ consensus (7. 11.2014) was reached which facilitated Xi-Abe summit meeting,
China’s moderation on South China Sea issues: The PRC is “now willing to work with ASEAN on reaching consensus towards conclusion of a code of conduct in the South China Sea at the earliest” (Chinese Premier Li Keqiang, Naypyidaw, 12.11.2014),
China’s improvement of ties with the ASEAN: Beijing desires to conduct “early harvest” projects to demonstrate to ASEAN states that the Maritime Silk Road is in their interest. Beijing would open a China-ASEAN marine cooperation center (Yang Jiechi, April 2015),
Increasing China’s exchanges with Vietnam: Chinese State Councilor Yang Jiechi was in Vietnam in October 2014 for a meeting with Vietnamese Deputy Prime Minister and Foreign Minister Pham Binh Minh. Their talks were held under the framework of the China-Vietnam Steering Committee on Cooperation, signaling a return to normalcy after maritime tensions. Vietnamese party Chief Nguyen Phu Trong is to visit China in April 2015; improvement in bilateral relations is expected.
What looks certain is that some kind of transformation in foreign policy is taking place in Xi Jinping’s China. For Xi, national rejuvenation is the overall strategic objective. It looks definite that to achieve that, he has come to consider seeking of economic interests outside the country, as a mean. The key question will be how that is going to impact on China’s external behavior, so far dominated by assertiveness? Surely, China will be against diluting the present core principle of its external approach – a combination of seeking win-win relationship and making no compromise on sovereignty related issues. This being so, hypothetically speaking, it will be welcome news to the neighbors of the PRC who remain concerned over Beijing’s aggressive push of its territorial claims, if the Xi Jinping leadership chooses to tone down the level of its external assertiveness at action levels. But as for now, this is not happening; an example is creation of artificial islands in South China by sea by China with an eye on gaining strategic superiority vis-à-vis other claimants. But policy changes in future look probable if one looks at the appearing signs towards shift of focus, as mentioned above. Much would depend on the nature of future domestic and foreign policy developments in China.
For India, the Prime Minister of which is visiting China in May 2015, the apparent latest prominence to economic interests externally could be of great interest. It may have to watch for signals during the visit of fresh Chinese ideas, if any, on contentious issues like trade imbalance and the border , in particular on the Chinese ‘stapled visas’ to Indian nationals and the continuing Chinese intrusions across the Indian border. It may especially be important for India to gain an understanding on the occasion about the meaning of Xi Jinping’s latest declaration on China’s readiness to sign friendship treaties with neighbors.
 Analysis by noted Chinese scholar Shi Yinhong of the Renmin University, Beijing (“ China’s Complicated Foreign Policy”, http://www.ecfr.eu/article/commentary_chinas_complicated_foreign_policy311562, dated 31 March 2015 )
 Timothy Heath, “ Xi’s Bold Foreign Policy Agenda – Beijing’s Pursuit of Global Influence and Growing Risk of Sino-US Rivalry”, China Brief, Vol 14 issue 6, dated 19.3.2015 http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews[tt_news]=43674&tx_ttnews[backPid]=25&cHash=071fa8755bd5400d7292613f67
 Michael D.Swaine, “ Xi Jinping’s Address to the Central Conference on Work Relating to Foreign Affairs: Assessing and Advancing Major Power Diplomacy with Chinese Characteristics”, China Leadership Monitor, No.46, 19.3.2015, http://www.hoover.org/publications/china-leadership-monitor.
 Xinhua , May 21,2013
 Timothy Heath, “China’s Big Diplomacy Shift”, the Diplomat, 22.12.2014
 China’s National Security Strategy, Shannon Tiezzi, the Diplomat, 24.1.2015
 Liu Jianfei, “An Evaluation of China’s Overall National Security Environment”, China Institute of International Studies, 14.11.14
(The writer, D.S.Rajan, is Distinguished Fellow, Chennai Centre for China Studies, Chennai, India.Email: email@example.com)