Letters | Why China under attack must resist the urge to turn inward

China’s current push for technological self-sufficiency is a page taken from its history
But that was then and this is now. In 2021, China is a multilateral player and must think about keeping its promises of global collaboration. Opening up more is the right choice

Xi Jinping

Letters

Published: 12:30am, 31 Jul 2021

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China has repeatedly positioned itself as a staunch supporter of multilateralism. President Xi Jinping has, on multiple occasions, called for the removal of barriers and sought global integration. During the Apec Informal Economic Leaders’ Retreat on July 16, President Xi proclaimed, “We must remove barriers, not erect walls. We must open up, not close off. We must seek integration, not decoupling.”

Indeed, China has given reassuring signals of its involvement in the global system. Foreign Minister Wang Yi has affirmed China’s commitment to existing multilateral platforms by stressing the central role of the World Trade Organization and the basic norms of international relations based on the UN Charter. On the other hand, China is also actively constructing new multilateral efforts, for instance, by joining Asean in the RCEP free trade agreement.

As the US rallies to present China as a global threat, such positive developments act as important indicators for other countries to lighten up about the China challenge and continue cooperating with this rising giant.

However, it is difficult to ignore China’s efforts to push for self-sufficiency. In the 14th five-year plan, specifically, technological self-sufficiency became a highlight. The actions following that plan reinforced China’s tendency to make inward-facing policies when faced with foreign pressure.

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In the semiconductor industry, the US-China tech war led to the Chinese government providing the industry with heavy subsidies. In 2020, China spent a record US$33 billion in industry subsidies, spurring Chinese tech firms on develop their own chip competency. TikTok owner ByteDance, for one, has jumped on the bandwagon and is developing AI chips. The increased investment in domestic semiconductor competence could undoubtedly decouple China’s supply chain from the world’s.

The oil and gas industry also reflected China’s attempts at self-reliance. Three state-run energy groups have been increasing domestic output while the market speculates that Chinese oil companies will be delisted in the US soon. Such speculation reflects the market’s lack of confidence in the Chinese companies not succumbing to governmental pressure to return.

The rationale for China’s move towards self-sufficiency is clear: hedging against the risks in a volatile and potentially hostile world. The US-China tit-for-tat tariffs, for example, encouraged China to boost domestic demand and reduce dependency on foreign supply chains so as to increase internal stability.

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China’s push for self-sufficiency is not new. In the Mao era, the policy of “self-reliance” (zili gengsheng) reflected China’s strategy to rely on domestic resources when surrounded by foreign “hostile forces”. Now, China is arguably taking a page from its own history, though the situational context has vastly changed.

Back then, China barely had any influence or economic power against the foreign “hostile forces”. In 2021, China is deeply entrenched in the globalised system. It must hence think further about how to keep the promises of multilateral collaboration while attempting to protect its domestic industries. As President Xi said, China “must open up, not close off”.

Tan Sin Lu, student, international politics, Fudan University