Friends and foes
Following the annual ‘Two Sessions’ gathering in Beijing and a Moscow meeting between Presidents Xi and Putin, Duncan Bartlett highlights China’s future plans, rivalries and alliances
China accounts for about one-fifth of the global economy, so it was inevitable that problems which arose during the Covid era would lead to severe global consequences.
With this undoubtedly at the forefront of his thinking, this spring the Chinese president Xi Jinping tightened his control over the government and the country.
In Beijing, loyal members of the Communist Party formally endorsed Mr Xi for a third term in office. His ministers promised to stabilise the economy, win back the confidence of international investors and increase China’s military budget.
Each of these developments has real significance for the rest of Asia, and the world as a whole. However, given that Chinese Communist officials are raised to speak in slogans which inflate the achievements of the Party and its leader, it is wise to treat their statements with caution.
Let us consider some of the issues which have been raised.
The new premier, Li Qiang, is a Xi Jinping loyalist. In a speech at the annual Two Sessions political gathering in Beijing, which took place in March, he heaped praise on Mr Xi, insisting he is the best person to be at the helm of the ship.
Mr Li also highlighted his own experience as a leading politician in Zhejiang and Shanghai, two of China’s most dynamic economic regions.
International investors are hoping that Li Qiang will take a broadly pro-business stance, avoiding the capricious approach towards wealth redistribution and regulation which has been a characteristic of government policy for the past few years. Sudden intervention by the Chinese government in the private education sector caused a particular shock.
At the meeting in Beijing, delegates were presented with a growth target for China’s economy. It was a cautious figure, set at around 5 per cent for this year, down from 5.5 per cent in 2022. Last year, China missed its target, recording a GDP growth rate of only 3 per cent, according to official figures.
Nevertheless, there are signs that economic activity is picking up quickly. Since the country’s zero-Covid restrictions were lifted, consumers have been encouraged to spend and invest – although the Chinese authorities, typically, are less forthcoming with data about the impact of the virus, now that people can mingle freely in crowded places and travel internationally.
Other important announcements from the Two Sessions related to security and defence. Xi identified national security as the primary concern of the coming years and restated his ambition to build a ‘world class military’, led by him personally.
China’s leaders said the budget for the military would rise by 7.2 percent this year. Yet it should be emphasised that the official figure on the defence budget is largely symbolic, as China does not disclose exactly how much it spends on the People’s Liberation Army – or where the money goes.
In a recent report, CNN noted that this year’s defence budget is more than double that of ten years ago and that China now controls the world’s largest army in terms of numbers, as well as the largest navy. It continues to advance its fleet of nuclear submarines and stealth fighter jets.
On the issue of US-China rivalry. Beijing’s perspective was explained at a press conference on the sidelines of the Two Sessions meeting by China’s new foreign minister Qin Gang, who also holds the role of state councillor.
‘If the US does not hit the brakes but continues to speed down the wrong path, no amount of guardrail can prevent derailing, and there will surely be conflict and confrontation,’ warned Mr Qin.
Claiming that the US wants to out-compete China, he said that ‘this so-called competition is all-out containment and suppression, a zero-sum game’.
Soon after, the leaders of the United States, Britain and Australia met in San Diego to consolidate their defence pact, known as AUKUS. It includes a deal for Britain to sell nuclear-powered submarines to Australia, in a move which is clearly designed to counter Chinese military expansion in the Indo-Pacific.
President Biden said the three countries were committed to ensuring the region would remain free and open, adding: ‘Forging this new partnership, we’re showing again how democracies can deliver our own security and prosperity, not just for us but for the entire world.’
The British Prime Minister Rishi Sunak warned that the challenges to global stability have grown more severe in recent times.
‘Russia’s illegal invasion of Ukraine, China’s growing assertiveness, the destabilising behaviour of Iran and North Korea – all threaten to create a world defined by danger, disorder and division,’ he said.
Of course, China sees the global situation differently. For Xi Jinping, it is the United States of America that is the primary troublemaker; dividing the world into rival blocs, dismissing the legitimacy of rival ideologies and always seeking to preserve its own hegemony.
In Xi’s mind, the ‘no limits’ partnership between China and Russia stands as a bulwark against American domination. In an article for the Kremlin newspaper Rossiyskaya Gazeta, published just as he arrived in Moscow in mid-March, Mr Xi stated that ‘China and Russia adhere to the concept of eternal friendship and mutually beneficial cooperation’.
Since the invasion of Ukraine, their economic partnership has deepened. More than 40 per cent of Russia’s imports come from China and 50 per cent of China’s energy is sourced from Russia, according to Gazprom. This has provided a boost to the Russian economy, which has been heavily impacted by international sanctions, supported by most democratic countries.
Another interesting development emerged in relation to the Middle East. The Chinese Ministry of Foreign Affairs revealed that China hosted secret talks between Iran and Saudi Arabia, which led to the resumption of diplomatic relations between the two countries. China insists its role was crucial in breaking the tension.
For Mr Xi and his political team, the Middle East deal enhances the reputation of China as a pragmatic peacemaker, a role which it would like to continue.
Other world leaders are sceptical. For British Prime Minister Rishi Sunak, China is an ‘epoch defining challenge’ which requires a coordinated response from countries with very different values.
Duncan Bartlett is the Editor of Asian Affairs