Beijing Sees Window of Opportunity in South Asia
BEIJING -- In 2003, China formulated the "Peaceful Rise," a foreign policy framework for how it would re-emerge as an influential player in the new multilateral order. The most recent demonstration of how Beijing is putting this vision into practice is the ongoing four-nation tour to South Asia and the Asia-Pacific by China's vice president and potential future leader, Xi Jinping.
Xi has visited Bangladesh, Laos, New Zealand and Australia, with a separate visit to Myanmar promised in the near future. Taken together, the deals he has signed on the tour shed light on China's principal strategic objectives in one of its key foreign policy arenas. Beijing's emphasis on regional development further demonstrates the potential of its economy-first approach to diplomacy, which seems not only to meet key national objectives, but is also greatly strengthening its geopolitical standing and influence throughout the Southern Hemisphere.
China overtook India as Bangladesh's largest trading partner last year, and Dhaka was the first stop on Xi's itinerary. There, the Chinese delegation finalized a series of infrastructure, defense and trade deals, including components of a road, rail and port network that will give China direct access to the Bay of Bengal. Alongside the recent agreement to redevelop North Korea's Rajin port, which allows Chinese access to the Sea of Japan for the first time in more than 100 years, Beijing has substantially reduced its logistical dependence on a small number of Indian Ocean shipping lanes (.pdf) -- long seen as a vulnerability by Beijing's strategists.
China's interest in Bangladesh and Myanmar is also heavily influenced by a desire to secure its southwestern border, and an effort to control water and other resources in southern Tibet. Economic ties with the two states also help create strategic buffers with India, and the most eye-catching deal announced last week -- plans for China to launch two Bangladeshi telecommunications satellites -- will have been duly noted in New Delhi.
Xi's second stop was Laos, a small neighboring state that serves several strategic functions for China. The exploitation of Laos' own resources is becoming economically viable for Chinese companies. The country also occupies a key position in China's trade routes with Southeast Asia, particularly in terms of access to the Mekong River. The retreat of traditional investors in Southeast Asia, above all South Korea and Japan, due to the financial crisis has been exacerbated by Vietnam's ongoing currency devaluation and political instability in Thailand. China seems well-positioned to take up this slack, and is becoming increasingly economically embedded in the region.
The next leg on Xi's tour, New Zealand (NZ), meets Beijing's needs for coping with another major domestic priority. NZ has one of the most productive agriculture sectors in the world, and food security is an issue of huge concern for China, as it struggles to support a growing population on farmland that is decreasing in size and quality. The two countries established the NZ-China Free Trade Agreement (FTA) last year, which will eliminate tariffs on 96 percent of NZ exports to China by 2019. The agreement has the potential to fundamentally realign the NZ economy. As Trade Minister Tim Groser pointed out, in the FTA's first year, the $600 million increase in bilateral trade was roughly equivalent to total NZ trade with Indonesia, during a period of declining exports to most major markets. China is also lining up investments of around $1 billion in NZ dairy firms as it seeks to increase quality and efficiency in its own agricultural industries.
Xi's last stop was Australia, where an enlarged Chinese delegation discussed areas of cooperation, such as infrastructure, resource exploitation (including the proposed Australian mining "super tax"), and energizing the recently resumed discussions for an Australia-China FTA. As evidence of China's attempts to increase its international "soft power," Xi was keen to stress "people-to-people" ties. The two countries signed $8.8 billion of economic deals, which will result in a greater presence for Chinese telecoms and mining companies in Australia, the acquisition by China of significant energy and mineral resources, and yet another port-access deal in Oakajee, Western Australia.
Last year's Rio Tinto corruption trial does not seem to have had a lasting impact on either governmental or business relations. Beijing is said to be pleased with the non-confrontational way Canberra handled the episode, and even before the trial began, Rio was negotiating a huge deal in West Africa with Chinese metals conglomerate Chinalco. China is already Australia's largest trading partner, and the mutual benefits of expanding this relationship are clear to both sides.
The results of Xi's tour yield benefits for China, as well as genuine economic opportunities for partner nations, and suggest the strengthening of new patterns of interaction throughout South Asia and the Asia-Pacific. China's steady accrual of strategic advantages is the result of a clear policy agenda and reflects a growing sophistication in Beijing's diplomatic and economic missions. Xi's agenda reads almost like a nation-state version of a survival checklist: secure territorial integrity; secure food, water and other natural resources; secure routes of access; seek both to cooperate with and hedge against powerful neighbor. Early plays in the "Peaceful Rise" were sometimes met with skepticism, but it has become increasingly apparent that domestic stability is indeed Beijing's top priority, and finds expression in its southward-facing foreign policy.
Evidence suggests China's expanding regional influence is creating wide-ranging benefits, from its controversial but seemingly decisive intervention to stabilize Sri Lanka -- a move primarily motivated by maritime interests -- to the new economic possibilities it brings to the table. South Asia is a key strategic arena for Beijing due to its diversity and richness of resources as well as its vital geographical function in China's trade and security concerns, and the Chinese are in for the long haul.
Moreover, with India failing to outline a comprehensive response and U.S. strategy complicated by its presence in Afghanistan and questions over its credibility in the region, when Beijing looks south, it must surely see a window of opportunity.
