18.3 China's evolving role in global politics and diplomacy

China's Global Economic and Political Influence

China's transformation from a centrally planned economy into the world's second-largest economic power has fundamentally altered global politics and diplomacy. Understanding how China projects influence abroad, and where it faces pushback, is central to grasping 21st-century international relations.

China's global economic influence

Market-oriented reforms launched under Deng Xiaoping in the late 1970s and 1980s gradually opened China's economy to foreign trade and private enterprise. Successive leaders deepened these reforms, and the results have been staggering.

• By 2020, China's GDP reached roughly $14.7 trillion, second only to the United States (Japan ranks third).
• China is the world's largest exporter and second-largest importer of goods, trading heavily in machinery, electronics, and textiles.
• Chinese outward foreign direct investment (FDI) has expanded across Africa, Southeast Asia, and Europe, giving Beijing economic leverage in regions historically tied to Western capital.
• Free trade agreements with partners like ASEAN, Australia, and South Korea have deepened China's integration into global supply chains.

This economic weight gives China significant bargaining power in international negotiations and makes other countries' economies increasingly dependent on Chinese trade and investment.

China's global political influence

China holds a permanent seat on the United Nations Security Council, one of five nations with veto power over UN resolutions (alongside the United States, Russia, France, and the United Kingdom). This alone guarantees China a central role in decisions about international peace and security.

Beyond the UN, China has increased its participation in bodies like the World Trade Organization and the G20, using these platforms to shape international rules in ways that align with its interests.

Soft power is another tool Beijing uses to build influence abroad:

• Cultural exchanges such as Chinese New Year celebrations and art exhibitions raise China's global profile.
• Confucius Institutes, established at over 500 foreign universities worldwide, promote Chinese language and culture, though critics argue they also serve as vehicles for political messaging and self-censorship on sensitive topics like Taiwan and Tiananmen.

Several factors limit China's political influence, however:

• Human rights concerns draw persistent international criticism, particularly regarding policies in Xinjiang, Tibet, and Hong Kong.
• Accusations of forced technology transfers and intellectual property theft have strained relations with the United States and the European Union.
• Rapid industrialization has made China the world's largest greenhouse gas emitter, and environmental problems like air pollution and water scarcity undercut its image as a responsible global leader.
• Territorial disputes with Japan, India, and Southeast Asian nations, along with strategic competition with the United States, create friction that limits Beijing's ability to build broad international coalitions.

China's International Partnerships and Initiatives

Belt and Road Initiative impact

Launched in 2013, the Belt and Road Initiative (BRI) is China's flagship global infrastructure program. It funds the construction of ports, railways, highways, and digital networks across Eurasia, Africa, and Latin America, aiming to reduce transportation costs and boost trade.

The scale is enormous: the BRI involves over 140 countries. For many developing nations, BRI projects offer infrastructure investment that Western institutions have been slow to provide.

Criticisms of the BRI are significant, though:

• Debt sustainability is a major concern. Countries like Sri Lanka and Pakistan have taken on large loans for BRI projects and struggled to repay them. Sri Lanka handed over a 99-year lease on its Hambantota Port to a Chinese state-owned company after failing to service its debt, a case that became a symbol of what critics call "debt-trap diplomacy."
• Some projects in Malaysia and Myanmar have faced delays, cost overruns, or outright cancellations due to financial and political risks.
• Critics describe a "String of Pearls" strategy, arguing that China uses BRI investments to build a network of strategic footholds, particularly along Indian Ocean shipping lanes, creating economic dependence that translates into geopolitical leverage.

China's relations with world powers

United States: The U.S.-China relationship is defined by deep economic interdependence alongside intensifying rivalry. China is one of the largest foreign holders of U.S. Treasury securities, and the U.S. remains a top export market for Chinese goods. Yet the two powers clash over tariffs and trade imbalances (the U.S.-China trade war that escalated in 2018 is a prime example), competition over technologies like semiconductors and 5G networks, and military posturing in the South China Sea. The status of Taiwan adds another volatile dimension: the U.S. maintains unofficial ties with Taiwan and sells it arms, while Beijing considers the island an inseparable part of Chinese territory.

European Union: China is the EU's second-largest trading partner, and the EU is China's largest. Economic ties are deep, but so are tensions. European governments worry about trade imbalances, restricted market access for European firms in China, and intellectual property protection. The EU and China also diverge on human rights and on approaches to multilateral governance, including climate policy.

Neighboring countries in Asia present a mixed picture:

• Japan: Deep historical animosity rooted in World War II and an unresolved territorial dispute over the Senkaku/Diaoyu Islands coexist with substantial economic cooperation and cultural exchange.
• South Korea: A strong economic partnership and shared concern over North Korea's nuclear program are complicated by historical grievances and friction over issues like the U.S. THAAD missile defense deployment.
• Southeast Asian nations: Countries like Vietnam and the Philippines contest China's sweeping territorial claims in the South China Sea, yet trade and investment ties continue to grow through the ASEAN-China Free Trade Area.
• India: Border disputes in the Himalayas (including deadly clashes in the Galwan Valley in 2020) and rivalry for influence in the Indian Ocean region define the relationship, though both nations cooperate within frameworks like BRICS and the Shanghai Cooperation Organisation.

China's role in global issues

Shaping the global order: China advocates for a multipolar world in which developing countries have greater representation in international institutions. To that end, Beijing has promoted alternatives to Western-led frameworks, most notably the BRI and the Asian Infrastructure Investment Bank (AIIB), which it founded in 2015 as a counterpart to the World Bank and IMF. China also contributes more troops to UN peacekeeping missions than any other permanent Security Council member, balancing national interests with the expectations that come with being a rising power.

Climate change: As the world's largest emitter of greenhouse gases, China's climate commitments carry global weight. Beijing has pledged to reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060. China is also the world's largest investor in renewable energy, pouring resources into solar, wind, and electric vehicle technology. Whether China meets these targets will significantly shape the trajectory of global climate efforts, and skeptics point out that China continues to build new coal-fired power plants even as it scales up renewables.

Regional security: The Asia-Pacific region presents China with overlapping security challenges:

• Territorial disputes in the East China Sea (with Japan) and South China Sea (with Vietnam, the Philippines, and others) have led to military buildups and diplomatic standoffs. China has constructed artificial islands in the South China Sea and equipped them with military installations, drawing international criticism.
• China plays a key role in nuclear nonproliferation, particularly in efforts to denuclearize the Korean Peninsula through negotiations with North Korea.
• Through the Shanghai Cooperation Organisation, China cooperates with Central Asian nations on counterterrorism and regional stability.
• Trade agreements like the Regional Comprehensive Economic Partnership (RCEP), signed in 2020, deepen economic integration, while security groupings like the Quad (the United States, Japan, India, and Australia) represent a counterbalancing effort that China views with suspicion.

The tension between economic integration and strategic competition in the Asia-Pacific is one of the defining dynamics of China's evolving global role.