China is making great efforts to increase its soft power, and promote a harmonious world.  This is sensible for an emerging big power which arouses suspicions and anxieties.  But China’s many foreign policy contortions – from aggression and stubbornness to conciliation and cooperation – often undermine these very efforts.

How can this happen? 

According to Linda Jakobson and Dean Knox of the Stockholm International Peace Research Institute, one of the reasons is that China’s foreign policy is conducted by many different actors with sometimes rival motives and diverse perceptions of China’s national interests.  China’s foreign policy makers are also harassed by a cacophony of different voices, reflecting China’s increasingly pluralist society, with the result that foreign policy decision making can be unwieldy, messy and inefficient.

Who are the main actors in China’s foreign policy? 

First and foremost there is the Communist Party of China (CCP) which holds supreme authority in China, above the position of the Government.  For example, Wang Jiarui, head of the Party’s International Department, is higher in the Party hierarchy than Foreign Minister Yang Jiechi.  China’s most critical foreign policy decisions are made in the Foreign Affairs Leading Small Group of the CCP, of which the Minister is but one member.  These decisions are then formally approved by the Politburo Standing Committee of the CCP. 

One example was the choice in 2006 to buy nuclear reactors from a US company (Westinghouse) rather than a French company (Areva).  In light of the highly political nature of this decision, President Hu Jintao’s’s blessing was necessary.  The contract was awarded to Westinghouse for three reasons: technical considerations; US irritation about the US/China trade balance; and the need for healthy Chinese-US ties.

After the CCP comes the State Council, the highest body in the Chinese Government, which is made up of ministries, administrations and offices.  Dai Bingguo, the presumed director of the CCP’s Foreign Affairs Leading Small Group office, is also the State Councilor in charge of foreign policy, and outranks both the ministers for foreign affairs and commerce.

The Ministry of Foreign Affairs (MFA) has seen its power decline over the past decade.  Its main function is to implement, rather than make, foreign policy decisions.  It is also the lead agency with countries of lesser importance.  Even for international negotiations, the Ministry usually plays second fiddle. 

At the Copenhagen climate change talks in December 2009, in a crucial meeting with countries like Brazil, India, South Africa and the US, Premier Wen Jiabao wanted to follow the Ministry’s view that China should make compromises to avoid being deemed an agreement-spoiler.  The Premier was opposed by a senior representative of the National Development and Reform Commission (NDRC) who refused to budge on China’s initial position against fixed targets for both developed and developing countries.  Thus, no compromise was reached, leading to the ‘Copenhagen fiasco’. 

MFA also faces competition from the People’s Bank of China, Ministry of Finance, Ministry of State Security and the Ministry of Commerce (MOFCOM).  MOFCOM is an influential player by virtue of its close to ties to the business community.  MOFCOM is a leading supporter of the controlled RMB exchange rate, which benefits exporters, even though it causes international tensions, not only with the US, but many emerging countries like Brazil.  By contrast, the People’s Bank of China would prefer to loosen controls over the exchange rate.  But the exchange rate has barely budged in recent times, with the result that Chinese inflation is now accelerating. 

MOFCOM and MFA are always at loggerheads over Chinese foreign aid which mostly consists of infrastructure projects carried out by Chinese companies or is linked to resource deals by China’s major State-Owned Enterprises.  Support for the ‘One China’ policy is a condition for receiving aid.

Next there is the People’s Liberation Army (PLA).  While its power has narrowed, it still has the upper hand for strategic arms, territorial disputes and national security towards countries like India, Japan, North Korea, Pakistan, Russia, and the US.  The PLA is a staunch advocate of a hard line toward Taiwan, and perceived US interference in cross-Strait relations. 

Over the past decade, the PLA has initiated, escalated or delayed tense international situations such as when in 2001 a US reconnaissance plane made an emergency landing on Hainan Island or in 2007 when the PLA shot down a Chinese weather satellite.  In recent years, the Chinese Navy has also been party to repeated disputes with Japan, South East Asian countries and the US over maritime security in the East and South China Seas.  Although the incident occurred after the time of writing, the PLA most probably played a major role in the escalation of the Senkaku Island dispute with Japan in 2010.

China’s consensus-driven decision making means lengthy and complicated deliberations, which sometimes end in deadlock.  For example, when a North Korean torpedo sank a South Korean naval vessel in March 2010, the Chinese government couldn’t reach a consensus on how to react.  Wang Jiarui supported the PLA’s view that North Korea had legitimate security concerns from the threat of the US, whereas top civilian leaders believed that China should not tolerate North Korea’s indiscriminate attack.  North Korea is the most divisive foreign policy issue among China’s leaders. 

China’s foreign policy decision making is plagued by many factors: weak collaboration between government and Party organizations; personal networks and allegiance to mentors; and mindsets shaped by education in Party schools with lessons in Marxism and Mao Zedong thought, and their own interpretation of history especially regarding the ‘century of humiliation’.

Large state-owned enterprises (SOEs) have a symbiotic relationship with the political leadership.  Their CEOs are appointed by the Party.  They benefit from state support for large business deals.  But the political leadership also depends on these SOEs which are key to maintaining high economic growth, and which employ large numbers of people.  These SOEs also provide the government with revenues, which are the lifeblood of modern Chinese “communism”. 

These companies can also have an important influence over foreign policy decision making, especially when it comes to security of supply issues for energy and natural resources.  Major deals with foreign policy ramifications include the China Metallurgical Construction Corporation’s acquisition of the Aynak copper mine in Afghanistan, and the new China-Central Asia natural gas pipeline which will carry over four-fifths of Turkmenistan’s gas production and supply nearly half of Chinese consumption.       

Over half of President Hu Jintao’s foreign visits between January 2005 and July 2010 were to countries where China’s three major national oil companies had interests.  Hu signed contracts for supply, joint exploration and asset transfer on their behalf in countries like Australia, Brazil, Gabon, Japan, Kazakhstan, Nigeria, the Philippines, Saudi Arabia and Viet Nam.  The China National Offshore Oil Corporation (CNOOC) has played a major part in China’s territorial disputes with South East Asian states over the Spratly Islands and with Japan over the East China Sea, in large part because of the areas’ untapped oil and gas reserves.

SOE activities can also clash with foreign policy.  In 2004, CNOOC began work at the East China Sea Chunxiao field without consulting Japanese authorities, thereby sparking a diplomatic crisis.  Oil companies were then upset by President Hu Jintao’s concession in June 2008 to Japanese Prime Minister Fukuda to develop a portion of the fields cooperatively in return for Fukuda’s pledge to attend the opening ceremony of the Beijing Olympics.  

The Export-Import Bank of China and the China Development Bank are also influential foreign policy actors, as they are respectively tasked with expanding Chinese trade, and promoting Chinese economic and infrastructure development. 

Among the other new foreign policy actors are the research community, media and ‘netizens’.  The Internet community is a hotbed of nationalism and criticism of the Chinese government for giving in to international pressure.

Overall, Linda Jakobson and Dean Knox conclude that there are three broad trends in China’s foreign policy:

(i)         Foreign policy decision making has become fractured between many actors – this means that foreigners must deal with all the relevant actors involved in an issue, not just the MFA.  For example, the White House had initially obtained MFA approval for a newspaper interview of President Barack Obama.  The Publicity Department of the Communist Party, which had not been consulted, then decided to censor it.

(ii)        While in general China’s continued internationalization is regarded by all sectors as inevitable, there are varying views among both officials and marginal actors regarding the degree to which China should prioritize internationalization in its development.  For example, the Ministry of State Security is concerned that internationalization will lead to an acceptance among Chinese citizens of Western values, undermining the Communist Party’s ability to manipulate discourse on such topics as human rights, transparency and accountability.  Foreigners thus need to recognize that they are not dealing with a monolithic government. 

(iii)       The view that China should defend and pursue its interests internationally is becoming prevalent, especially among new foreign policy actors.  Those researchers and intellectuals who believe that China should shoulder more responsibility in tackling global problems like climate change, nuclear proliferation and infringement of intellectual property rights are a minority.  The mainstream view among both old and new actors is that calls by industrialized countries to contribute to global public goods are an attempt to slow the rise of China.

The analysis of Linda Jakobson and Dean Knox is of course fascinating.  But it may also give some insights into the inherent instabilities and vulnerabilities of the Chinese model:

.  China’s system of consensus-based foreign policy decision making contains echoes of what Dutch writer Karel Van Wolferen once called the “enigma of Japanese power”.  Japanese power was carefully balanced between various groups, namely, bureaucrats, political cliques, industrialists, agricultural cooperatives, police, press and gangsters.  This meant that there was there no centre of power.  Private and public sectors were blurred.  Overall, the system was in balance.  No-one was too powerful.  But ultimately, no-one was leading. 

This potential lack of decisive leadership is one great risk for China going forward  As China’s society and economy become more and more complex, and its relationships with the rest of the world deepen and become complex, effective leadership will be even more necessary than ever.

.  Countries like the US, which have sufficient resources to practice very sophisticated multi-stakeholder diplomacy are able to engage with the broad range of China’s foreign policy actors.  For smaller countries, it is more of a challenge.  And for a country like Japan, which is plagued by domestic political instability, and which has a new and very amateurish government, it is almost impossible to undertake comprehensive engagement with the Chinese foreign policy establishment.  Japan appointed a former businessman as ambassador, when quite clearly a sophisticated political operator was needed.   

.  With China having so many different groups in positions of power, and without meaningful checks on their use of this power, the scope for accidents is enormous.  So many different scenarios for such accidents can be imagined involving North Korea, Japan and the US.  And while conflict can easily start by accident, winding down a conflict once started can be much more difficult.

.  The jasmine revolutions in the Middle East have demonstrated the fragility of seemingly strong and corrupt authoritarian regimes.  The ultimate goal of the Chinese Communist Party is staying in power.  The ultimate goal of the People’s Liberation Army is protecting the Party.  But China’s engagement with the rest of the world inevitably exposes the country to Western values and uncensored information which by their nature undermine the Party’s control.  Foreign policy must serve all the interests of the Party, and that is something which is increasingly difficult to do. 

Beijing must be horribly aware that one day both the party and the Party will be over.  That is why it is so desperately hanging on now. 

References:

New Foreign Policy Actors in China

Linda Jakobson and Dean Knox

SIPRI Policy Paper no. 26

http://books.sipri.org/product_info?c_product_id=410  

The Enigma of Japanese Power: People and Politics in a Stateless Nation, Karel Van Wolferen.

http://www.amazon.co.jp/Enigma-Japanese-Power-Politics-Stateless/dp/0679728023