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Diplomacy

Is China undermining its neighbours’ trust by buying political influence with foreign aid?

China secured valuable allies and partnerships by pouring US$45.8 billion into infrastructure investment in the East Asia and Pacific region from 2000 to 2016

PUBLISHED : Wednesday, 27 June, 2018, 8:01am
UPDATED : Wednesday, 27 June, 2018, 9:29pm

While China secured valuable allies and partnerships by pouring US$45.8 billion into infrastructure investment in the East Asia and Pacific region through the first 16 years of this century, the influence it has gained over regional domestic politics has its neighbours watching it warily, according to US researchers.

The suspicion comes as China strives to create a narrative that tells the story of its peaceful rise rather than its ascent into a regional “threat”, according to AidData, a US-based project that tracks flows of development assistance.

In its latest report, AidData noted that instead of handing out money “opportunistically”, Beijing strategically deploys a mixture of public diplomacy tools – based on an assessment of potential risks and rewards – to curry favour with countries that represent high-value market opportunities for China.

This finding helps to explain why China’s biggest regional rivals – Japan, South Korea and Australia – have received more, and more diverse, diplomatic contact from it, including official visits, than other countries that are close to it geographically, such as Indonesia, Cambodia, Malaysia and Thailand.

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“These countries (Japan, South Korea and Australia) matter to Beijing because of their ability to undermine or strengthen China’s geostrategic position in light of their economic, diplomatic or military assets,” said Samantha Custer, the report’s lead author and AidData’s director of policy analysis.

AidData, which is based at the College of William & Mary in the eastern US state of Virginia, identified a “relationship between the number of official visits an East Asia and Pacific country received and their degree of foreign policy alignment” with China.

“The more official visits an East Asia and Pacific country received, the more likely they were to vote with China in the UN General Assembly,” the researchers said.

Thus, China’s elite-to-elite diplomacy has become “one of the most potent tools for Beijing to cultivate close ties with political elites”, AidData said. Such tactics have proven especially effective in its effort to build ties with the Philippines, it said.

Of the US$48 billion Beijing spent in the region from 2000 to 2016, an overwhelming 95 per cent, or US$45.8 billion, went to infrastructure development. By contrast, China spent US$273 million on humanitarian aid, US$613 million on budget support/direct funding to a government and US$90 million on debt relief, according to AidData.

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Those investments mostly predate the unveiling in 2013 of President Xi Jinping’s Belt and Road Initiative, a massive plan for connecting China with Africa and Europe through cross-continental networks of new roads and bridges.

Since the Belt and Road’s launch, it has emerged as Beijing’s most commonly used tool for winning over regional neighbours, AidData found.

Beijing’s success in building relationships with regional elites has come as it moves to increase its political and economic clout worldwide in an effort to reshape a global order that has been dominated for centuries by the West.

For the report, AidData interviewed 76 public, private and civil society leaders, analysed public data and conducted case studies in the Philippines, Malaysia and Fiji.

It concluded that the region’s residents tended to view China as a highly influential country while their leaders valued China as a supplier of ready capital.

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Beijing’s long endeavour to gain international influence through foreign aid incorporates an effort to marshal a range of diplomatic strategies to connect with nations instead of handing out money to capitalise on an opportunity, AidData said.

Depending on the amount of risk and reward and the target regional nation, the diplomatic activities can include financial investments; official visits targeted to policymaking elites; the forming of sister cities; and the establishment of Confucius Institutes, the researchers found.

The Confucius Institutes – a Beijing-backed language and culture education cooperation programme with foreign universities – have been accused of undermining academic freedom at host campuses by advancing Beijing’s political agenda on issues such as human rights, Taiwan and Tibet.

Custer said China’s diplomatic efforts could be compromised during political transitions.

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A case in point is Malaysia, where newly elected Prime Minister Mahathir Mohamad said he would review the Chinese infrastructure investment deals signed by his predecessor Najib Razak, who is believed to be close to Beijing.

“A number of factors could threaten these gains: disputes in the South China Sea, the perception that China does not always follow through on its infrastructure promises, and the spectre of indebtedness as countries struggle to repay mounting debts to Beijing,” Custer said.