Minutes of Symposium on International Development and China’s Diplomacy in 2015

Su Xiaohui & Zhu Zhongbo

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Minutes of Symposium on International Development and China’s Diplomacy in 2015

Su Xiaohui & Zhu Zhongbo

Su Xiaohui is Associate Research Fellow and Deputy Director of the Department for International and Strategic Studies, CIIS; Zhu Zhongbo is Associate Research Fellow of the Department for International and Strategic Studies, CIIS.

From December 12 to13, 2015, a symposium on International Development and China’s Diplomacy in 2015 was co-hosted by the China Institute of International Studies (CIIS) and China Foundation for International Studies (CFIS) in Beijing. Over 200 participants from various government departments, academic institutions and news media attended the symposium. Foreign Minister Wang Yi attended the opening ceremony and delivered a speech. State Councilor Yang Jiechi attended the closing ceremony and delivered an important speech. Vice Foreign Minister Zheng Zeguang was also present at the closing ceremony.

Topics discussed during the symposium included The International Pattern and Major-Country Relations, International Security and Regional Hot Issues, Changes in the Global Economic Structure, New Developments in China’s Periphery, China’s Diplomacy Toward Developing Countries, China’s Diplomacy in 2015 and Its Prospects in 2016 and Progress of the Belt and Road Initiative and Related Issues. The main standpoints of the experts attending the conference are summarized as follows:

Global economic growth is unsustainable

According to the latest forecast by the International Monetary Fund, the global economic growth rate in 2015 was 3.1 percent, which continues thetrend of the annual growth rate staying around 3 percent since 2010. The annual growth rates over the last five years suggest that world economy has entered a normal phase. However, global economic growth at present is unsustainable considering it mainly depends on the toxic combination of “extremely low interest rates, debt growth and requirement management.”

With massive monetary easing, new global debt since 2008 until now has reached $60 trillion. As of June 2014, the global accumulated debt was $199 trillion, which is more than 2.7 times the total global GDP. This is very rare in history. High debt growth leads to extremely low or zero interest rates, which causes stocks to continue rise. The total value of equities worldwide in 2015 was $75 trillion, a record high, and $11 trillion more than the total in 2008 before the financial crisis.

The US Federal Reserve raising interest rates will further aggravate the turbulence of the global financial markets. This will result in massive global capital flows back to developed countries. The consequence will be great turbulence in the stock, currency and bond markets and probably in developing and emerging economies. Financial risks, particularly in developing countries, will rise. Should a finance crisis erupt, world economic growth will drop a percentage point.

The battle for new international rules and order is unfolding

Countries are taking actions to make long-term and institutional arrangements for the evolution of the world order and international system through bilateral and multilateral platforms. The developed countries are creating new rules for trade and investment, while the BRICS countries are seeking a larger voice in the international finance system. The two sides maintain the dynamic of interdependence and cooperation on the one hand, conflict and containment on the other.

The security order in the Asia-Pacific region is in a transition period, changing from a dual structure, featuring China and the United States as the two main forces, to a trinary structure, or possibly multi-structure. Regional public security goods are in short of supply. Both the United States’ Asia-Pacific alliance system and the Shanghai Cooperation Organization can only provide public goods for certain areas and forms of security, which is insufficient to fulfill the security demands in Asia. These security mechanisms are both incompatible and exclusive. The United States’ Asia-Pacific alliance system and the SCO, with China and Russia at its core, have difficulty coordinating and connecting with one another. The Association of Southeast Asian Nations Regional Forum and the East Asia Summit are more inclusive, however, they have less capability to solve problems. China, the United States and Japan are the three major powers which will determine the future regional order in Asia. Regarding the future security order and rules in Asia, countries in the region have considerable divergences.

Competition and cooperation among major powers are even more prominent

Although geopolitical competition was further demonstrated in 2015, the dynamic tends to be “fighting without breaking up,” with more cooperation and buffers. Counterterrorism has provided room for a turnabout in the hostility between Russia and the United States and European Union. The possibility of a compromise being reached between both sides on the Ukraine issue has increased. The United States and the European Union intend to ease the sanctions they have imposed on Russia under the condition that The Minsk Agreement is complied with.

Strategic completion between China and United States in the Asia-Pacific region has intensified. Yet the United States chooses to keep a low profile, entering its longest period of strategic shrinkage since the Cold War. It is emphasizing its dominate role in rule-making and relying on its alliances to carry out containment of China, avoiding direct military and/or security conflicts with China.

Unstable factors in China’s neighboring areas have increased

The militarization of Japan seems to be speeding up. Japan continues to implement the new Japan-US Cooperative Defense Guidelines and has strengthened joint exercises with the United States, insuring its seamless military cooperation with United States in the West Pacific. In the meantime, Japan has also strengthened its security cooperation with the Philippines and Vietnam, and has interfered in the South China Sea issue by participating in a joint military exercise. Japan has also joined hands with the United States in resisting China’s Belt and Road Initiative.

Due to the interference of outside powers, the South China Sea issue has become more multilateral and international. The possibility of conflict between China and United States, along with the unpredictability of South China Sea situation, is increasing. The difficulty of coordinating relations with major powers and neighbors should not be underestimated. The Philippines unilaterally initiated international arbitration to challenge China’s rights and interests in South China Sea. This has set an example for other claimant countries.

There are threats including terrorism, religious conflicts and volatile regimes in areas along the Belt and Road. The political and security risks are rather high. Japan, the Philippines and Vietnam have disputes with China over maritime rights and interests. India has concerns about China entering its sphere of influence and thus holds a negative attitude toward the Belt and Road Initiative. Some countries question the sustainability of the Belt and Road Initiative and China’s capability to manage and control major projects and resolve the disputes.

Developing countries face both opportunities and challenges

The ASEAN community has been successfully established and will promote further institutional cooperation between ASEAN and China, India, Japanand the United States. The ASEAN community may also play a positive role as a buffer for major powers games.

Africa will become one of the new power centers in the global economy in the coming two decades. Since 2000, the economic development of Africa has come hard on the heels of the development of Northeast Asia. The growth rate of the African economy has remained constant at 5 to 6 percent over last 15 years. Many emerging countries, such as Nigeria and Ethiopia, have sprung up. With an abundant population and natural resources, Africa has great potential and flexibility. African governments attach great importance to learning from foreign experiences in governance and economic development. The current high growth rate of the African economy is expected to remain the same for the next twenty years, hence Africa will occupy an increasingly important position in the global economy.

Latin America has witnessed a rise in the power of the left and a decline in the power of the right, which accords with the development cycle in the region. During rapid economic development, ordinary people expect a greater share of the wealth. This is when the power of the left increases. When economic growth is slowing, social productivity forces need to be released and the power of the right is dominant. The difficulties being faced by the left in Latin America does not mean its end. The ups and downs of left-wing and right-wing power in the region will not lead to serious turbulence. Latin American countries have generally complete democratic political systems and legal institutions. There will be no regime changes causing serious society turbulence as happened in Middle East and Africa. Both left-wing and right-wing powers adopt pragmatic foreign policies. No matter which party comes into power, there will be no change in the overall situation of cooperation between china and Latin America.