Written evidence from Center for China and Globalization Hong Kong Council (CIR0009)

This is a response to a request for written evidence on the issue of China and the international rules-based system with narratives from the Chinese viewpoint on the international rule-based system with examples illustrated on the One Belt One Road Initiative, Hong Kong and China’s strategy in global governance.

The author, on behalf of Center for China and Globalization, suggests that the direction of Chinese foreign policy and China’s attitude on the international rules-based system are tightly connected to Chinese vision on global order and the thrust to become the great power. Also, Chinese has a very realistic and practical view of the international rule system, which is regarded as a tool to achieve and secure the national interests of different states. This response concludes that China would be more engaged with the existing international rules-based system while trying to create its own rule system via the foreign policy like Belt and Road Initiative. The author recommends the British Government and the Committee to consider the British foreign policy toward China with a cooperative approach in the domain of education, business, law and international politics.

Summary of the Written Evidence

Nationalism puts China on an ambivalent position when engaging with international rule based system. 

China regards the existing international rule-based system as a tool for pursuing the status of great power and the leading position in international affairs.

Hong Kong would be more integrated as being the crucial part of the Initiative of Big Bay Area, while Hong Kong would remain as the open, free, efficient and diverse international financial center for China to promote the Belt and Road Initiative.

The rule system China trying to create through the Belt and Road Initiative might reshape the regional order economically and politically.

UK can cooperate with China through her soft power on guiding China how to better engage with the existing international rule-base system.

The Center for China and Globalization and its Hong Kong Council

The Center for China and Globalization (CCG) [1] is an independent Chinese social thinktank based in Beijing dedicated on China’s growing role in the world, drawing from issues of global migration, foreign policy, international trade and investment. The Center was founded in 2008 by Dr. Wang Huiyao, the Counsellor to State Council, China. More than 100 in-house researchers and staff serve this thinking hub with branches across China. CCG Hong Kong Council has its mission for providing independent research with more diverse sources to Chinese society and government. The Council is supported by various retired senior politicians and business leaders.[2]

The Reasons for Submitting Evidence

As a social think tank independent from Chinese Government, the CCG is dedicated providing insights on Chinese political issues and foreign affairs to the world. Global governance from Chinese perspective is one of the Center’s strength and it fit with the topic the Committee inquired on.

The United Kingdom is one of the major Western powers that had closely support the Belt and Road Initiative. Providing a clearer picture on the direction of Chinese foreign policy to the selected Committee would benefit the Chinese-British Relation in the post-Brexit era.

The Center for China and Globalization also welcome any opportunity for conducting the second track diplomacy with the relevant UK institutions.

Chinese View on International Rule-Based System and Global Order

There is no single account of ideology that Chinese Government adheres to its foreign policy in the contemporary era. Rana Mitter vividly describes that “China is an active participant in the world order, but one somewhat ill at ease with own status and position”. This observation provides a very clear clue to understand the contemporary Chinese perception on world order, especially when China is call the reform for the international rule-based system.

The double standard on the practice of international human rights law exacerbates the negative images Chinese had on the international rule-based system, which is regarded as the disguise of the will of the powerful nations in the international politics. The ambivalence between lacking trust in the international rule based system and the wish to play a more dominant role in the world order made China taking selective approach on engaging the part of international rule base system that fit its national interest.

Since the reign of Xi-Jinpin, China becomes more active in global affairs and in reshaping the world order. Under Xi’s reign and the Working Report of 19th Congress of Chinese Communist Party, China would be more engaged with the international rule-based system through the claims to reform the system and building up its own version of international system. There are three features important for understanding the current direction of Chinese foreign policy and Chinese view on international system, including the nexus between victimhood and nationalism, the thrust to reform the current international system, and Chinese engagements and its strategy in international organizations.

Nexus Between Victimhood and Nationalism

The victimhood from the imperialism since 1840 fueled the root of nationalism in contemporary China. The experiences and frustrations of dealing with the imperial powers through international treaties have brought images in Chinese understanding that the international rule-based system is the tool used by the imperialists to exploit China.

Nationalism serve as the basis of legitimacy for the current Chinses ruling party and construct the political rhetoric of Chinese Great Rejuvenation, which sets the goal to challenge the current hegemony United States and try to emerge as the leading nation in the global order. To enhance and maintain its legitimacy, the Chinese Communist Party would need to rely on nationalism, while such motivation might not result to expansion wars, but rather imply to have a greater voice in the international community and to create a new system and international order that would benefit China.

The Thrust to Reform the Existing International System

When fighting against imperialism for independence is no longer a political goal to attain, the force of nationalism drives China to acquire the position to be push for the reform of the existing international system, which is regarded by Chinese as unfair and unequal. Such foreign policy direction might be regarded as to pursue the position of hegemony in the eyes of some Western media. It is true that some opinions in China, especially those with military background might be regarded as aggressive, while some are regarded as moderate, for example the debate on war and use of force between Wu Jianmin, the former Chinese Ambassador to France and Luo Yuan, the military theorist from PLA Academy. However, both sides would agree that China should pursue a higher position to create a more equal international system and democratized international relations for the world. By stepping up to call for reform a more equal system, the influence of China on global governance would also increase and become eminent.

From viewpoint of Yan Xuetong[3], the competition between Chinese and American for the leading position is inevitable. The existing international organizations and their rules are established on the interests of the imperial powers after WW2, which are restricting the rise of China and not being favored to China. To have a more equal international system, China should call to reform the existing system while not becoming a new hegemony.

Another viewpoint from other scholars like Yuan Peng[4]and Tang Shiping[5] regards that as having more influence and wealth to stepping into global affairs, China should not hesitate to be more engaged with the global governance and to improve the international system. China is trying to not just becoming a nation that is great on its size and strength, but also on it influence in the global platform in different domains, including trade, finance, education, internet, and security for building a better world.

Since Xi Jingpin came to power in 2012, China is aiming to achieve its great rejuvenation. In the domain of international relations, China has become more assertive, as it is called “self-confidence” in various government statements and policy. Xi’s speech on global governance states “The fundamental purpose for us to join global governance is to serve the goal of Chinese Rejuvenation. This goal requires us coordinating the domestic and international circumstances to direct the system of global governance for a more equal and reasonable development. And therefore, we can create a health and benign environment for the development of China and the peace of world.”[6]The call for democratization of international politics, and the cosmopolitan view of building the “community of shared future” have all become the active topics in the Chinese Diplomacy that send out the message to the world that China and capable to the supporter of the international system with necessary reforms for its sustainability.

Chinese Engagements and its Strategy in Global Governance

Sino-US Relations play an important role in Chinese strategy on global governance. China proposes multilateral scheme on tackling global issues with the initiative that China can jointly take leadership and call for reforms in the global politics. According to Jin Can-Rong[7], there are four differences between American and Chinese approaches on engaging with global governance. Firstly, China emphasize on the function of UN system, while the United States prioritize its alliance bonds. Secondly, China regards development is the priority in global governance issues, while the United States upheld security. Thirdly, Chinese takes multilateral approach, while American take unilateral approach. Lastly, on foreign policy Chinese does not interfere domestic politics, while American does. The four differences provide China the legitimacy to call for reform on the current unipolar international order.

Trading and financial affairs are another domain China is highly engaged with. Long Yongtu[8] regards that China should become the supporter of the international economic and financial order. For example, the initiative of Asian Infrastructure Investment Bank (AIIB) is not to replace the existing institutions, like World Bank or Asian Development Bank, but to enahnce the existing international financial system. The need of capital investment for infrastructure in Asia for the coming decade is 1.7 trillion dollars, but Asian Development Bank can only provide 17.5 billion, which only count as 15 of the total need. Therefore, China is providing more opportunities to support the existing international system that support the development of states through setting up multilateral institutions or direct aid to less developed countries.

The cooperation of BRICS is another platform China try to build since 2007. According to He Yafei[9], the BRICS Summit held in 2017 shows that through the scheme of BRICS+, the developing countries has been connected and the dialogues of the Global North and the Global South are promoted. This achievement is significant because it increased the voice of developing countries and extend the diversity and inclusiveness of BRICS cooperation. The BRICS+ scheme shows its importance by building a network of developing countries for mutual benefit and improving global governance to be fairer and more equal.

The Position of Hong Kong in the Chinese Initiatives

After the Transfer of sovereignty over Hong Kong in 1997, Hong Kong has become the most international city of China. Under the Basic Law, Hong Kong is a special administrative region with its own different system than the Mainland China. The design of “One Country, Two System” has enabled Hong Kong to play a very important and unique role in the international cooperation and global governance of China. According the former Chief Executive, Leung Chun-ying, Hong Kong can play the role of “Super-Connector” for linking up China and the rest of the world.

Chinese understanding on the Joint Declaration is that the sprit and the effect of the Declaration has been merged and expressed into the Basic Law of Hong Kong. The Basic Law is the incarnation of the Declaration. Both documents recognize the current political, economic, financial, and legal systems practiced in Hong Kong, but Basic Law is the document that continually possess the effect to bind the relations between Central Government in Beijing and the Government of Hong Kong. Also, it is important to note that the Declaration per se did not grant the right or power to the contracting parties to decide whether China had abided its obligations.

With the national policy and initiative of Big Bay Area (Pearl Delta Bay Area), Hong Kong would be more integrated as being the crucial part of the initiative of Big Bay Area, while Hong Kong would remain as the open, free, efficient and diverse international financial center for China to promote the Belt and Road Initiative. The Initiative would enable Hong Kong to remain as the international financial center for China with the function to attract foreign capital and investment to invest in China and enable Chinese capital to invest abroad.

Belt and Road Initiative and Global Governance

The Belt and Road Initiative would reshape the regional order economically and politically, as it contain two main elements: the internationalization of Renminbi and the Chinese foreign investment. The Initiative would create new international system and organizations for global governance to reform the current international system.

The excess capacity of industries would push up the inflation and unemployment rate in China. Exporting the excess capacity is good for China and the countries hosting Chinese capitals and investment, because it brings GDP growth to these countries and provides infrastructures to the less developed countries. By investing in infrastructures and building industrial parks overseas, China also needs the cooperation of the hosting countries for security and maintaining order to make the Chinese capitals secured. Chinese investment also brings trading opportunities, employments and economic growth.

The internationalization of Renminbi would change the international financial order by challenging the monopoly position of US dollars in the international market. When using Renminbi as the trading and reserve currency, the developing countries can reduce the risk of having their foreign reserve depreciated when the major Western countries are employing quantitative easing monetary policy.

British Roles for Cooperation with China

UK can cooperate with China through her soft power on guiding China how to better engage with the existing international rule-base system. UK has matured legal and consulting service, well-developed think tank, well-known educational institution and high-quality platform for innovations. These are all the kind of the soft power that China need and UK can provide. The domains for China and UK include education, business, law and international politics.

UK have well-established higher educational institutions, which can be beneficial for equipping the talents Chinese government would need for the more engagement of global governance. Also, as receiving the highest number of Chinese students in the Europe, UK would have a higher chance to to education and cultural exchange. Such exchange would enable China to better development its soft power.

On the business side, China and UK can be the supplement to each other. China is a huge market that welcome foreign investment, and also a huge demand for high-end products. UK has advantages on medicine, sustainable energy, higher education, which can meet the need of China. Also, China has the capital and the political will to invest on infrastructure and to meet the needs of UK.

As many Belt and Road Initiative countries were colonized by Britain, they also inherit the common law system. It would be helpful for British professional service industry to cooperate with Chinese business for their investment in the countries practicing common law system. Also, UK can lead the cooperation among the common law jurisdictions on the Belt and Road Initiative for setting new common standard and legal practices.

As China try to reach its goal on reforming the international system, UK can be the supporter for these initiatives for building the common good international society. After Breixt, UK can have a more independent foreign policy, which can bring more flexibilities to China, and played an important role on the Belt and Road Initiative, which can provide a new platform for UK in the international politics to continue its influence as a global power. When more closely cooperates with China, UK would also be benefited by the position a part of the rule setter in the new and reformed international system.

January 2018