China’s big political event this summer focused on the economy as the Communist Party leadership outlined a reform agenda for the next decade aimed at making the country a global leader in technology while addressing social problems. But the Third Plenum, as the five-yearly meeting is known, was also preoccupied by the economic impact of China’s worsening relationship with the western powers and how to address it.
It was at the Third Plenum in 1978 that the party shifted its focus after the death of Mao Zedong from class struggle to economic development. The 1993 meeting saw another major move with the establishment of the socialist market economy and Xi Jinping’s first Third Plenum as general secretary in 2013 launched reforms across a number of sectors.
Last month’s meeting confirmed the current economic and strategic course, with a major focus on making China a technology superpower and making the country self-sufficient in key areas. This emphasis on the resilience of supply chains mirrors to some extent the response in the United States and the European Union to the shocks of the coronavirus pandemic and Russia’s war against Ukraine.
But as foreign minister Wang Yi made clear in an article in the People’s Daily this week, Beijing sees foreign policy as an essential part of its development strategy. He describes a world undergoing dramatic changes that represent both a threat and an opportunity for China.
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“A new round of scientific and technological revolution and industrial transformation is developing deeply, the international balance of power is undergoing profound adjustments, the momentum of the Global South is growing, and peace, development, co-operation, and win-win outcomes are becoming the prevailing aspirations and trends. China’s development is facing new strategic opportunities,” he writes.
“At the same time the international situation is increasingly complex and turbulent. Anti-globalisation sentiments are on the rise; there is a notable increase in unilateralism and protectionism, there are frequent occurrences of local conflicts and unrest, global challenges are escalating, and certain major powers are engaging in hegemonic bullying, arbitrarily containing and suppressing emerging forces.”
When Wang refers to “certain major powers” engaging in hegemonic bullying he is talking about the US and chief among the emerging forces he says are being contained and suppressed is China. He says that China must resolutely oppose external forces “smearing its image by using issues such as Taiwan, Hong Kong, Xinjiang, Tibet and human rights”.
Outlining the main elements of China’s foreign policy, the first bilateral relationship Wang mentions is with Russia, calling for the development of their partnership. With the US and the EU on the other hand, he suggests that the best that can be hoped for is maintaining stability.
Developing countries in the Global South, many of which are increasingly important trading partners for China, are the basis for what Wang hopes will be “a circle of friends” around the world. And he reaffirms China’s commitment to reforming the system of global governance and “a more equitable and orderly multipolar world”.
The Chinese leadership blames the US for dividing the world into rival blocs, and Xi told Ursula von der Leyen last year that he thought Washington was trying to goad him into invading Taiwan. Xi said he was not going to take that bait, but some Chinese observers are uneasy about Beijing drawing so close to Moscow.
Shen Zhihua, the country’s leading historian of the cold war, warned recently that Vladimir Putin’s attempt to reconstitute the Russian empire represented a security threat to China. “Now the relationship between China and the US is not good, so once again China and Russia have a common enemy that pushes them to unite. In my opinion China should stick to its foreign policy of the early days of reform and opening up, not aligning with others or drawing lines based on ideology,” he told the South China Morning Post.
Shen, who runs the Centre for Cold War International History Studies at Shanghai’s East China Normal University, believes that period has useful lessons for China today. He points out that the cold war had economic as well as ideological origins in disputes over US loans to the Soviet Union and German reparations as well as Stalin’s decision not to participate in the Bretton Woods system.
“The systemic confrontation during the cold war first manifested itself in the economy, and the onset of the cold war began with an economic decoupling. In this process both the US and the Soviet Union had strategic misunderstandings about each other, influenced by ideology,” he said.
“Every step that led to the cold war had a chance of being reversed but the US and the Soviet Union still fell into the abyss of the cold war. In terms of the causal relationship between changes in diplomatic and economic policy, the hardening of the US diplomatic approach towards the Soviet Union was a prerequisite for a complete change in economic policy, while the overall shift in the Soviet Union’s diplomatic approach towards the US was the result of a complete disappointment with the US in economic policy.”