China’s short- and long-term strategies – increasing challenges for the West
February 17, 2023
In some of my recent blogs, I paid attention to China’s changing style in international relations. Or should I say President Xi Jinping’s style? It becomes more and more obvious that China has strong political and economic ambitions, also globally. This may mean that even more focus will be put on Taiwan which is increasingly developing as an important U.S. issue – both politically and economically. It is therefore necessary that also the EU – and when possible and necessary Sweden itself – accelerate the formulation of a concrete China strategy. The U.S. has already come considerably longer in this respect – with no major difference between Trump and Biden.
The new – or changing – China
Readers of this blog may have observed that I in recent articles several times have described Chinese attitude and strategy changes that started a couple of years ago, from internationally having been a relatively humble and business-minded country to nowadays presenting itself as self-confident, tougher and less compromising.
Today, China wants to export its “superiority regime model” as much as possible to the rest of the world, particularly to Africa, South America and some countries in South East Europa. China has already gained quite some influence in these continents and regions, also by granting – often expensive – new loans for infrastructure etc.
Altogether, China has become much more ideological, authoritarian and nationalist.
This change can be directly explained by the modified leadership of President Xi Jinping who in the past ten years replaced some kind of the previously collective leadership within the Standing Committee by giving substantially more power to himself. In 2013, the first year of Xi in office, the objectives by the Third Plenum with many plans – also for Westerners – toward more market economy looked quite promising. This allowed then for some cautious optimism about future economic progress – cautious optimism that, however, in the meanwhile to a high extent has been shattered.
Thus, economic policy has been landing on the wrong gangway after 2013 – not easy or even impossible to reverse in the forthcoming years or even decades. “Decades” could be the right term when including the Taiwan issue. In my view, Taiwan has to be regarded as the most complicated political and economic issue of the future for both China and the U.S. – with a lot of potential for escalating conflicts between both countries.
Taiwan – a complicated issue for the whole world
Taiwan is very special for both Mainland China and the U.S. Both countries may at some point find a reason to start a war. The official China wants Taiwan back and has not ruled out the use of force to achieve reunification -but without mentioning a certain year. Some analysts see 2049 – the 100th anniversary of the founding of the People’s Republic of China – as a possible year of confrontation, others predict 2035 when China is expecting to achieve “the status of a moderately prosperous country”. Certain China experts are even of the opinion that the price for an invasion including far-reaching Western sanctions would be too large for China – both what concerns Chinese exports and imports.
On the other hand, the belief that the U.S. most probably would not accept a Chinese invasion of Taiwan seems to be widely spread among Western analysts. One can hardly imagine what such a development would mean to the global economy.
Taiwan receives American support not only for democracy reasons but also for its close link to high-tech software. 65 percent of all semiconductors and 90 percent of all advanced chips in the world are produced in Taiwan which currently does not leave much space to Mainland China, the EU and the U.S. Having pointed at this fact, nobody should be surprised that China, the EU and the U.S. now eagerly aim at visibly enlarge their own production of intermediate IT-products at home. Infineon’s planned chip investment in Dresden is such an example.
Political priorities
Before Xi’s entry into the highest political positions, strategic foreign policy was not really an important issue for China’s political leaders. Most issues dealt with trade policy and international business relations. Now, foreign policy is judged as very important since President Xi wants to see China as the most influential country in the world.
The revival of active foreign policy means all the same that China also applies strategic policy objectives at home with new policy tools that have been explained above. New domestic policy tools and objectives are indeed badly needed for Chinese leaders in order to divert the people from the disappointing economic performance – divert by using an ideological, authoritarian and nationalist stance in communication with the Chinese people.
Conclusion:
The analysis of China is about to become increasingly difficult – particularly when including the Taiwan issue. It is quite new in a way that China and President Xi want to become more powerful in a global perspective, not only at home by the authoritarian and nationalist leadership style. Western companies should observe these ongoing changes of Chinese political leadership.
Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
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