Continuing a Peaceful Rise
China's Foreign Policy After the Leadership Transition

An Interview with Shen Dingli

By Greg Chaffin
September 6, 2012

This fall, China will hold its 18th Party Congress, where it is widely expected that Xi Jinping will be named general secretary of the Chinese Communist Party and assume the reins of power from Hu Jintao. This leadership transition comes at a critical time in China’s foreign relations, as it seeks to manage ongoing territorial disputes with neighbors, as well as cope with the United States’ recently announced plan to engage in “strategic rebalancing” toward the Asia-Pacific.

NBR asked Shen Dingli (Center for American Studies at Fudan University) to discuss the implications of the leadership transition for China’s foreign policy, its relations with neighboring states, and the future of the U.S.-China relationship.

China will undergo a once-in-a-decade leadership transition later this year. Is Chinese foreign policy likely to undergo a transformation under Xi Jinping, or will it remain largely consistent with that of the Hu Jintao administration?

On the one hand, it is unlikely that the new regime would bring about a fundamental shift in China’s foreign policy, given the continuous rather than abrupt evolution of the nation’s interests and the need for continuity in domestic economic policy, as well as in light of the international balance of power. On the other hand, it is improbable that nothing would change in the coming years. The new leadership is well prepared to deal with the international system and its institutions. An increased sense of confidence derived from China’s growing competence in dealing with the international community will render new opportunities for engagement; however, a more complicated international environment will require China to adopt a mature mentality if it wishes to employ diplomacy and its comprehensive competitiveness effectively.

The greatest test the leadership will face in the near term will be how to address China’s disputes with neighboring states over interests in the South China Sea. China is unlikely to depart from its current policy of reconciliation through bilateral and multilateral interaction, which it sees as an opportunity to demonstrate its leadership abilities in settling disputes to the broader international community.

Another area of challenge and opportunity for China will be in forging rule-based norms of cyber and space security. The new leadership’s policies toward these and other similar issues will go a long way toward determining China’s ability to realize its considerable potential and become a capable and responsible new superpower.

How might policy toward Taiwan change under the new administration? What cooperative steps can Beijing and Taipei take to build on the improvements made in cross-strait relations over the past several years?

Whether or not the new administration can further nurture a stable cross-strait relationship will test its leadership competence. On the one hand, the gap in hard power across the strait will widen over the next decade, effectively curtailing the chance of the pro-independence faction to alter the status quo. On the other hand, calling for rapid cross-strait political reconciliation or even engagement over matters of security would likely increase Taiwan’s apprehension. Beijing’s rational approach could be to foster deeper trade and economic collaboration with Taipei, and build bonds through irreversible engagement. Furthermore, as long as both sides stay within the one-China framework, the two would be in a position to explore more opportunities to expand cooperation in the international arena.

How will the Xi administration approach the issue of maritime territorial disputes with China’s neighbors? In an effort to consolidate power within the military, do you think Xi will pursue a more assertive policy, particularly with regard to the South China Sea? Is Beijing likely to seek resolution to any of these matters?

The new administration will likely stick to the present policy of seeking to resolve the disputes through international legal institutions with the consideration of relevant historical evidence. Theoretically China retains the right to resolve these disputes using any and all means at its disposal, but ideally it would prefer to pursue a diplomatic solution. Whether China will be more assertive toward its territorial claims under the new administration depends on how it views the stakes involved and the cost effectiveness of defending them. Naturally, these perceptions are a function of many domestic and international factors.

Internal factors primarily include energy security and access to other mineral and fishery resources. In fact China will face increasingly grim prospects with regard to resource security in the short run, and its external behavior could be affected to some extent by such pressures. Nevertheless, the fundamental fix for this challenge is to significantly raise its resource efficiency – the ultimate goal being to reach the level of Japan. Ideally, China will cut its net energy consumption in the coming years in addition to resuming the export of crude oil. Crucially, the next administration will need to strategically invest in China’s long-term energy future.

Externally, on the South China Sea issue, the new leadership needs to present a package deal to China’s ASEAN neighbors in order to tackle their respective claims in a truly balanced manner. Such measures might include preventive diplomacy, and the co-management and development of disputed areas, waters, and resources.

Entering the second decade of the new century, China must be careful that its foreign policy does not become characterized by its disagreements with others, but rather, by its ability to propose and build consensus. Through demonstrating respectful leadership in working toward regional reconciliation, China will assure the international community of its peaceful intentions.

How has China sought to build and enhance its ability to project and influence other nations through the application of soft power? How has this helped combat or counteract regional concerns over Chinese intentions and strategic aims?

China must abide by the rules of international engagement so as to present itself as a responsible stakeholder. This could help dispel some concerns over China’s intentions and strategic aims. Beijing can best present and project its soft power through promoting its own social and economic development. Furthermore, China could enhance its capacity to positively affect other nations by stressing its responsibility to protect its own people and extend such protective assistance overseas through proper international platforms.

How does China view the ongoing strategic rebalancing of the United States toward Asia? How has China reacted to U.S. overtures for increased economic integration within the region, in particular through regional institutions such as the Trans-Pacific Partnership (TPP) and the Asia-Pacific Economic Cooperation (APEC)?

The United States has never left Asia, so it is simply stressing its interests in enhancing its presence and interaction with Asia. While the United States aims to stabilize the region its actions carry the potential to either achieve its professed purpose or lead to greater instability. China and the United States share many common interests in regional stability and Beijing shall welcome U.S. movement toward its declared end. Meanwhile, the United States needs to act cautiously to assure, with honest impartiality, that all parties will be in compliance with international law.

China welcomes U.S. engagement in the region through the TPP and APEC. The TPP points in the right direction by setting a high standard for the future of regional trade. Ideally, Beijing will speed up its preparations for engaging the TPP. While China will likely engage only incrementally, it stands to benefit in the long term. As for APEC, the United States and APEC are mutually indispensable so there is no reason to be upset over U.S. engagement within this multilateral institution.

What issues offer the most potential for future collaboration and cooperation between the People’s Republic of China (PRC) and the United States? What issues are likely to become or continue to be sources of disagreement between the two countries?

Any issue can be an opportunity or a challenge. Among various possibilities, increasingly balanced trade might offer the most potential for collaboration between the two. China will soon surpass the United States as the world’s number one importer and expects to double its imports over the next five years. During the same span, the United States aims to double its exports. There is a good possibility that both countries’ plans may be mutually beneficial.

More gloomy prospects arise when considering issues pertaining to access to and security of the global commons—space, maritime, and cyberspace, etc. These issues are likely to dominate the disagreements within U.S.-China strategic interactions, while subjects such as Taiwan are likely to be less explosive over the next decade.

What concrete and realistic steps can the United States and China take to enhance regional cooperation and reduce mistrust and the potential that mutual misperception will spiral downward toward conflict?

While the Taiwan issue is less explosive, it has driven the distrust between the PRC and the United States, particularly with regard to the controversies associated with the global commons. This has led both China and the United States to hedge in peacetime in response to these strategic issues. Therefore, while neither side will become complacent regarding the unlikely event of a contingency erupting across the Taiwan Strait in the near future, they ought not to treat this possibility as an insurmountable barrier toward establishing mutual trust and averting a regional arms race.

Greg Chaffin is an Intern at The National Bureau of Asian Research.