LONG READ: China reshaping a new multipolar world order

LONG READ: China reshaping a new multipolar world order
China wants to expand its influence in the Pacific Rim and then Eurasia as well as improve its relations with Europe, but it is going about this very slowly to try to avoid direct confrontation with the US over issues such as Taiwan. / bne IntelliNews
By Ben Aris in Berlin April 12, 2023

ED: this is the second in a two-part series looking at China’s emerging role in Eurasia and its relationship with Europe and Russia.

French President Emmanuel Macron caused a storm with his trip to China in the middle of April to meet China’s President Xi Jinping. Macron was lambasted as a “Gaullist” attempting to aggrandise himself on the international stage by playing at peacemaker, but only succeeded in undermining Western efforts to rein in the menacing Chinese state that has refused to condemn Russia’s war in Ukraine.

In March China emerged at the top level of geopolitics after China’s President Xi Jinping travelled to Moscow for an ostentatious three-day show of support for President Vladimir Putin in defiance of Western objections.

In a nod to European unity, Macron invited President of the European Commission Ursula von der Leyen to join him at the last minute, but while there was one trilateral meeting between the three of them, Macron spent hours talking to Xi alone with only interpreters present.

Macron called on Europe to take charge of its own destiny and “not follow where the US leads.” He went on to add that Europe should become its own superpower, but was accused of being tricked by Xi into peeling Europe off from the US ahead of a widely anticipated confrontation between the two behemoths, and being paid off by cutting many lucrative deals with the 60 top French businessmen in his entourage.

But what actually happened was more subtle than that. If you read the interview in Les Echos, what you find is something quite different from the "Macron sold out the West" hyperbole that has dominated the public response, according to Sam Greene, a professor of political sociology at King’s College London University.

"Do we have an interest in speeding up the situation with Taiwan? No,” Macron said. "The worst thing would be for us to think that we, Europeans, have to be followers on this subject and to adapt to the American rhythm and a Chinese overreaction. Why do we have to follow the pace set by others? If there is an acceleration of the conflagration of the duopoly, we will not have the time nor the means to finance our strategic autonomy and will become vassals, whereas we can be the third pole if we have a few years to build it.”

Macron did not offer to allow China to take Taiwan; he offered no compromise at all. He simply suggested it was in Europe’s interest to slow down the pace of the confrontation to give diplomacy a chance to work. He also said that it was in Europe’s best interest to make up its own mind where it stands on China and not simply follow the US lead, and most importantly, Europe should set its own pace that it feels is in its best interests.

Macron clearly fears that Europe will get caught up in an accelerating bipolar conflict between Beijing and Washington that is not of its own making and where it will have little room to manoeuvre.

“The trap for Europe would be that when it arrives at a clarification of its strategic position, it would be caught in a disruption of the world and crises that would not be ours,” Macron told Les Echos.

“At some point, we have to ask ourselves, what are our interests? What is the pace at which China wants to move? Does China want an offensive and aggressive approach?"

BRICS bloc

And there's the rub. Tensions are rising. There is already one war in Europe and there are fears rising that a second could start in the South China Sea. The key is to understand what China wants.

Things are moving fast as Putin’s war has disturbed the global order and is increasingly forcing countries to choose sides. A crushing sanctions regime has been brought down on Russia and now Western and Russian diplomats are travelling the world trying to get the non-aligned countries of the Global South to support their sides.

Notably the leading emerging markets, the BRICS (Brazil, Russia, India, China and South Africa), have all rejected Western sanctions, as have most of the Middle East and many African countries as well. These countries are driven together in part by a lingering resentment of past colonialism.

“Under capitalism, the Western powers have viewed countries of the Global South as “others”, treating them as hunting grounds for cheap resources or markets,” says Yao.

As bne IntelliNews has reported, there is an emerging BRICS bloc where the leading emerging markets are banding together to push their own interests and also in reaction to the increasingly aggressive US. The unintended consequences of the extreme sanctions regime on Russia, which was excluded from the international financial system by the SWIFT sanction and the weaponisation of the dollar, have unsettled many countries of the Global South, who are now seeking to protect themselves in case these tools are used on them. The BRICS bloc is emerging as a multipolar counterweight to the US hegemony, albeit being young and unco-ordinated so far.

“A new international order has begun to emerge amid the disintegration of the old system. The main generative force in this dynamic is China, which is already the second-largest economy in the world and is a civilisation that is distinct from the West,” says Yao Zhongqiu, an eminent Chinese historian, who recently penned a long essay entitled "five centuries of global transformation: a Chinese perspective" that lays out the Chinese world view.

As bne IntelliNews reported, China and the West are on a collision course, as the US is unlikely to give up its lead to a Chinese challenge and has already introduced the CHIPS legislation that bans high-end technology exports to China as it tries to preserve its lead.

Yao explains China’s foreign policy in this fast-moving geopolitical change by “tianxia”, or the 15th century idea of “all under heaven”. In those days the Ming emperors conceded that the world was too big for a single power to rule and sought instead to draw its competitors into a “mesh” of mutual co-operation and co-existence.

“The world is too large to be effectively governed by any country alone. The sages understood this and so their tianxia order never attempted to expand all over the known world at the time, nor did later generations,” says Yao. “Today, China does not seek to impose any system onto other countries; with such moderation, the struggle for hegemony can be avoided.”

In modern terms this is similar to the “multipolar” world that both Putin and Xi have been pushing and is core to Russia’s recently updated foreign policy concept.

Pacific Rim

In practical terms Yao says there are three phases to China’s expanding role on the global stage, and the tianxia will be built progressively, “to avoid a collision with the existing hegemonic system.”

China splits the world up into three regions: the Pacific Rim, Eurasia and beyond at the other end of the “global island.” China’s immediate goal is to focus on the first two and leave the rest alone for now.

“China’s efforts should begin in the innermost layer to which it belongs, East Asia,” says Yao. “Traditionally, China, the Korean peninsula, Vietnam, Japan and other countries in this region formed a Confucian cultural sphere; however, after the Second World War, despite these nations successfully modernising, relations between them have deteriorated due to the pressures of foreign powers such as the United States and Soviet Union.”

So far China has done its diplomacy through economics. It is already the biggest trade partner with all the countries in Asia and increasingly it is the biggest with Eurasian countries, including Russia, where mutual trade turnover will top $200bn this year. Notably, China’s trade with Ukraine, which is already seen as being firmly in the US camp, was only $35bn in 2022. But against that China’s biggest trade partners are the US and the EU, with which trade has already topped $1 trillion in 2022.

Even in Asia, China has its work cut out for it, as both South Korea and Japan are also firmly in the Western camp. In addition, South Korea is home to 15 US military bases and over 85 military bases in Japan, including the Kadena Air Base, the largest US military installation in the Asia-Pacific region and the largest wing in the Air Force.

China has moved to counter this military US presence in the Pacific by rapidly militarising the South China Sea, by building naval bases on the Spratly Islands and newly created artificial islands built on reefs, expanding its maritime territory in the process and causing numerous disputes with the other neighbouring counties.

But the biggest headache of all is the status of Taiwan, which Beijing resolutely claims as its own. Unlike Ukraine, Washington has promised to arm and defend the island should China try to invade. It also happens to be home to the largest and most product high-end semiconductor labs in the world.

"Anyone who expects China to make compromises and concessions on the Taiwan issue shoots oneself in the foot," Xi told Macron and von der Leyen during their visit to Beijing last week. “These are unrealistic dreams."

What Yao is describing is a bid for control by China in Asia that he assumes will push the US out of the region – slowly but peacefully. “As the achievements and strength of such regional efforts grow, the power of the United States and its world order will inevitably fade out, and the process of global transformation will rapidly accelerate,” says Yao.

But that is not a given, as America’s heavy militarisation of Japan at least will pose a serious problem for China and the recent AUKUS military alliance between Australia, the UK and the US is a military alliance specifically designed to resist this push.

Eurasia and beyond

China has already made big inroads into Asia and dominates the regional economy, but the next layer of the onion is Eurasia.

China has actively been promoting its Belt and Road Initiative (BRI) in Central Asia, focusing on building a land-based link between Asia and Europe that avoids the US-dominated maritime connection.

Launched by Xi in 2013, to date more than 200 BRI co-operation agreements with 149 countries and 32 international organisations have been signed as part of this process.

Historically, China successfully balanced the land and sea. The BRI is a modernisation of these policies. The BRI will “develop an integrated and balanced world system, with the ‘Belt’ aiming to restore order on the “world island,” while the ‘Road’ is oriented towards the order on the seas,” says Yao.

Rail links already connect China to Europe, and heavy investment into things such as the Blackstone industrial park just outside Minsk in Belarus provides a bridgehead for this trade into Europe.

But Beijing is moving beyond investment as a foreign policy tool as the war in Ukraine has catalysed the political process. In this respect Putin’s Eurasian Economic Union (EAEU) and Beijing’s Shanghai Cooperation Organisation (SCO) are two sides of the same coin.

“Central to these regional efforts is the SCO, in which China, Russia, India and Pakistan are already member states, Iran and Afghanistan are observer states, and Turkey and Germany can be invited,” says Yao.

As bne IntelliNews reported, the role of the EAEU has changed dramatically in the last year and the Kremlin is in the process of retasking it. Originally set up as a potential partner for the EU to create Putin’s long-standing foreign policy goal of creating a single market “from Lisbon to Vladivostok,” now business with Europe has been all but shut down, the Kremlin is looking to expand the EAEU south and east into Asia, where the EAEU’s interests now increasingly overlap with the SCO, which was specifically mentioned in the new Russian foreign policy concept.

But by refusing to accept the Western sanctions regime and openly backing Putin, China has openly challenged the US’ claim to be leader of the free world. But more than that, Xi needs Putin, even if Russia has been demoted to junior partner, to build the emerging BRICS bloc, as Russia remains a major power in Eurasia.

China’s Eurasian project runs up to the Ukraine, Russia, Belarus borders, where it is likely to have a lot of co-operation on the eastern side of that line. But as bne IntelliNews has been reporting, China has been investing heavily in manufacturing and production in countries of Central Europe, but less into infrastructure such as rail links.

Macron’s visit to Beijing may prove to be a bellwether for China’s future relations beyond Eurasia. The tianxia concept calls for good commercial relations with Europe and clearly both the transport links China has been building between Asia and Europe suggest that China intends relations to remain cordial and the $1 trillion worth of trade to continue. By bringing 60 top businesses with him to China, Macron appears to welcome this interest in mutual trade. One commentator described China’s relations with the US as “competition through rivalry” and those with Europe as “competition through co-operation.”

"China has always seen Europe as an independent pole in a multipolar world and has supported it in exercising strategic autonomy," Xi told Leyen and Macron, "We insist that relations between China and the EU are not aimed at a third party, are not dependent on anyone and are not controlled by anyone."

The West is powerful. It is home to two thirds of global GDP and has a long lead in weapons technology. But it is in decline too, argue the Chinese, thanks to its poor demographics and de-industrialisation, after the globalisation of the last two decades saw much of its production move overseas. That process has only been accelerated by the current energy crisis that has seen more heavy industry closed down, made “economically unviable” by soaring energy costs. Washington has tried to halt the process, but has gone from being a major producer to a net importer that has seen US debt balloon unsustainably, Yao argues.

Yao argues that China, with its full-cycle industrial production basis, is well positioned to take over the mantle of global powerhouse but still has a lot of work to do to get ready.