Beijing making a counterplay to Washington's Asia-Pacific pivot

China appears to be responding to US muscle-flexing in Asia, with moves including its own development bank and a bid to reopen the Silk Road

PUBLISHED : Saturday, 05 July, 2014, 4:02am
UPDATED : Saturday, 05 July, 2014, 6:04am

The Silk Road, an obscure Kazakh-inspired security forum, and a US$50 billion Asian infrastructure bank are just some of the disparate elements in an evolving Chinese strategy to try to counter Washington's "pivot" to the region.

While Chinese leaders have not given the growing list of initiatives a label or said they had an overall purpose, Chinese analysts and diplomats said Beijing appeared set on shaping Asia's security and financial architecture more to its liking.

"China is trying to work out its own counterbalance strategy," said Sun Zhe, the director of the Centre for US-China Relations at Beijing's Tsinghua University, who has advised the government on foreign policy.

Added one Beijing-based Western diplomat who follows China's international relations: "This is all clearly aimed at the United States."

US President Barack Obama's pivot, as the White House initially dubbed it, represented a strategy to refocus on Asia's dynamic economies as the United States disentangled itself from costly wars in Iraq and Afghanistan.

China sees the pivot as an attempt to contain its growing influence, especially given that the United States is strengthening its ties with Asian security allies such as Japan and the Philippines, which have bitter territorial disputes with Beijing in the region's waters. Washington denies this.

One key part of China's diplomatic outreach has been to breathe life into the little-known Conference on Interaction and Confidence Building Measures in Asia (Cica), which has languished since Kazakhstan proposed it in 1992 in order to promote peace and security.

Cica comprises two dozen mostly Asian nations, as well as Russia and some Middle Eastern countries. The United States, Japan and the Philippines are not members.

China took over as chairman of Cica for three years at a summit in Shanghai in May. There, President Xi Jinping spoke about a new "Asian security concept", saying China would explore the formulation of a code of conduct for regional security and an Asian security partnership programme.

While Xi gave few details and made no direct mention of disputes in the South China Sea, he warned Asian nations about strengthening military alliances to counter China, an oblique reference to the US pivot.

"Asian problems must be resolved by Asian people, and Asian security must be protected by Asian people," Xi said.

Another Chinese initiative is the US$50 billion Asian Infrastructure Investment Bank, which Xi proposed in October during a visit to Southeast Asia.

Finance Minister Lou Jiwei said this week that Beijing would likely have a 50 per cent stake in the bank, which diplomats see as a possible rival to the World Bank and the Asian Development Bank (ADB), though China says its role is a complementary one, not competitive.

Washington and Tokyo have the biggest voting rights in both the decades-old institutions.

China sees the infrastructure bank as a way to spread the message of its benign intentions in Asia, where developing countries such as the Philippines and Vietnam accuse Beijing of being the aggressor over territorial claims.

"China upholds a basic guiding principle in regional diplomacy - being friends and partners with our neighbours," Lou said.

China has also dangled financial and trade incentives to Central Asia, backing efforts to resurrect the Silk Road trade route that once ran between China and the Mediterranean.

Many of China's neighbours can see the glint of steel beneath the robe
Analyst Matthew Goodman

China is also pushing ahead with various trade pacts in the region, but is not part of negotiations for the Trans-Pacific Partnership, a 12-nation bloc whose two biggest economies are the United States and Japan.

Not everyone is convinced China's initiatives will amount to much.

"Some of those things are more about the optics of these issues rather than the realities of a Chinese-led order," said Matthew Goodman, senior adviser for Asian Economics at the Centre for Security and International Studies in Washington.

China's foreign policy since the country began economic reforms three decades ago has traditionally followed the maxim of late paramount leader Deng Xiaoping , of "hiding one's strength and biding one's time".

Asked this week whether China was carrying out its own pivot, Foreign Ministry spokesman Hong Lei said China was pursuing a policy of good neighbourliness.

A senior Obama administration official said Washington was paying close attention to Xi's approach to Asia.

"We noted his statement at the Cica conference about Asia for Asians, the growing criticism of US alliances and the Asian infrastructure bank," said the official, who requested anonymity.

"It's raising serious questions about whether the US vision and the Chinese vision are fully compatible," he added.

A second senior US official said Washington had not been assured that the infrastructure bank would adopt the high governance and other standards of institutions such as the World Bank and the ADB. He said the administration did not see how such an entity would "add value" for the region and that Washington would be making this point to Asian allies.

While they were not members, the United States and Japan were welcome to join the bank, Lou said.

Top Chinese and US officials will get the chance to discuss the bank and other issues during annual talks in Beijing next week, a meeting known as the strategic and economic dialogue.

At the start of the Cica summit, China turned on the pomp, with live television showing Red Flag limousines delivering leaders one by one to a Shanghai conference centre, where they walked down a red carpet to shake hands with Xi.

Most recently, Xi feted suspicious neighbours India and Myanmar last Saturday to celebrate the 1954 signing of almost forgotten principles of peaceful coexistence.

He cited Indian Nobel literature laureate Rabindranath Tagore in a speech to India's vice-president on the 60th anniversary of the Five Principles of Peaceful Coexistence, an early cold war pledge of peace between China, India and the country then known as Burma.

Xi has gone out of his way to court India, which hosts exiled Tibetan spiritual leader the Dalai Lama and with which China has a festering border dispute.

Still, China's messages of peace can come across as ham-fisted.

"China has long engaged in a kind of smile diplomacy in the region but the challenge for China is that many of its neighbours can see the glint of steel beneath the robe," analyst Goodman said.