Striking the right balance of power

Economic leverage and communication key to a rising China's new foreign affairs strategy

The Chinese economy is already the world's second largest, with more than 30 years of strong growth behind it and more room to grow, and its economic power has translated into increasing political power.

China's historical, economic and institutional background is a particularly challenging setting for a rising power in a Western-dominated international system.

This together with its transition from different stages of development mean that its foreign affairs approach has to be redefined.

It has become increasingly important and urgent for China to establish a new foreign affairs strategy to address changes in international structures and environment, and in its own stature as it moves up the pyramid of economic competitiveness.

China's non-intervention policy has been a successful strategy in the early stage of development, but the country's increasing influence and growing interests overseas require a higher degree of involvement.

The history of the US represents a good example of the transformation in foreign policy associated with the emergence of a superpower. Contemplating the initial policy of isolation and the subsequent historical evolution of the Monroe Doctrine in the US is a way to understand how a country's foreign policy changes with increasing levels of economic development and scales of assets overseas during its elevation to a superpower.

Under the new circumstances, it would be better strategy for China to leverage its rising economic power in international affairs to better promote its interests worldwide, and to utilize cooperative opportunities to improve its ties with various countries. China needs to find the right balance between the necessity to exert greater global influence and the need to avoid being too aggressive.

Strategic collaboration between China and the US, Europe, Russia, Japan, emerging neighbor countries, and BRICS are the most important.

The Sino-US relationship is arguably the most important bilateral relationship in the world, and is tightly bound by economic relations and increasing cultural ties. This relationship frequently undergoes tensions due to a variety of economic and political issues, and this is likely to continue.

China has suddenly been thrust toward the forefront of the discussion as a potential superpower, especially following the global financial crisis and during the ongoing European debt crisis. As the two largest national economies in the world, China and the US are set to play the primary roles in shaping the global economy in the decades to come, and their relations could be strengthened through four main economic channels - improving trade relations, promoting common strategic sectors, rebalancing domestic economies, and coordinating for an optimal policy-mix at a global level.

China and Europe have developed strong relations over time, becoming each other's largest trading partner. The European debt crisis offers opportunities for China to assist Europe in a time of need and further strengthen ties. Investment from China into Europe is likely to accelerate in the years ahead, and investors should target industrial or sector-specific clusters rather than by country borders.

A number of elements make China's relations with Europe easier than with the US, and these could thrive through cooperation in maintaining a high level of trade by avoiding tariff wars, increasing Chinese investment into Europe, and maintaining China's strategic support amid the debt crisis.

The fact that President Xi Jinping chose Moscow as his first foreign trip after taking office is an indication of the strategic importance of Sino-Russian ties, and the strength of the bilateral relationship in recent years.

Relations between China and Russia have significantly improved since the start of the new century, a thaw embodied by the signing of the China-Russia Treaty of Good-Neighborliness, Friendship and Cooperation in 2001, which covers cooperation in numerous areas related to national integrity and sovereignty, economic and social development, military know-how, science and technology, energy resources, transport, nuclear energy, finance, aerospace and aviation, and information technology, among others. Relations could be reinforced by cooperation in the fields of energy and resources, establishing trade agreements, and coordinating roles in international organizations as a way toward achieving a better balance of powers globally.

The China-Japan relationship is one of the most complex bilateral relationships in Asia. Due to brutal historical conflict, this relationship has a strained nature weighing on it independent of any current issues, and this is a disadvantage right off the bat. Recent tension caused by a dispute over the Diaoyu Islands is a symptom of this distrust, rooted in historical reasons. It is likely that political and diplomatic ties will take a long time to fully mend, and the bilateral relationship will likely remain tense until China's ascension to superpower status is complete, and Japan no longer views China as a competitor but rather a neighboring superpower.

The relationship could improve by exploring synergies at the level of trade, investment, high technology, and environment, as well as coordinating on regional issues despite historical tensions.

Internationally, relations represent an opportunity for a win-win solution for the new world. China's "infrastructure for commodity" model, orderly manufacturing-line transference and spreading the impact of the renminbi will promote local development while building a growing sphere of influence independent of existing global powers.

Communication is an equally important strategy in international affairs, especially for a rising power like China facing great challenges on how to reveal its intentions to other countries. As a country grows in power at an astonishing pace, it is natural for the established powers and neighboring countries to feel a degree of apprehension, and to question whether or not the rising superpower will pose a threat to the national interests of any given country.

This creates what can be described as a "trust deficit" between China and many other countries. Distrust is a vicious cycle, where a lack of trust leads to actions and communication that cause further distrust. A failure to address the issue will result in the trust deficit growing wider. Communication should therefore play an important role in alleviating the trust deficit.

Improving China's communication strategy, particularly through advocating complex interdependence and re-emphasizing China's peaceful history, would go a long way toward smoothing the transition to superpower status. China would benefit from improved communication in promoting cooperation and diplomacy through a variety of methods, both official and non-official, including cultural bridging, establishing regular official communication platforms, and promoting grassroots communication channels.

A farsighted new foreign affairs strategy together with effective communication will greatly benefit China on its way to becoming a bona fide superpower. Approaching international affairs tactfully and pragmatically while sticking to the bottom line can be expressed as an "iron fist in a velvet glove" strategy. This presents a gentle, pleasing outer demeanor while encompassing a stronger core.

This is to say, even if China's bottom-line issues dictate that the message be harsh, deftly communicating with other countries will improve relations, or at the very least, not strain them as much as a stiff, unyielding stance would.

The US is arguably the country that has mastered the "iron fist in a velvet glove" the most, able to pursue its own agenda but still claim a mantle of righteousness.

Particularly on issues that are likely to strain relations, such as trade or territorial disputes, it could be beneficial for China to organize its communications in a multi-dimensional manner, being rigid when the situation calls for it, and flexible when there is room for negotiation.

The author is head of research and chief economist of Haitong International Securities based in Hong Kong. The views do not necessarily reflect those of China Daily.

(China Daily Africa Weekly 11/08/2013 page10)