China’s global footprint: From capturing to crafting institutions

China’s approach to global positioning is transitioning from capturing to creating and shaping new structures and platforms. It is thus generating an entirely new framework of multitudinous opportunities to revise the post-World War Two order.

Key takeaways:

“Hide your strength and bide your time” once seemed the default foreign policy posture of China. The early 2010s witnessed the emergence of a more prominent and forceful “middle kingdom” keen to leverage its economic dynamism and development. The Xi Jinping era brought about not only the internal consolidation of the Chinese Communist Party’s power but also a concerted effort at the “rejuvenation of the Chinese nation.”

The shift to a more activist approach initially focused on the United Nations and its agencies, as well as on post-World War Two organizations such as the World Bank and the International Monetary Fund, with the primary aim of rebalancing them in favor of China. Beijing has been quite successful in its efforts across various dimensions, ranging from funding and increased participation to influence and capture. Its revisionism is now well charted across various dimensions, and the country is currently in the midst of another transition: towards the crafting of new international structures.

Establishing new organizations and platforms

The Belt and Road Initiative (BRI) is probably the most familiar framework established by China over the last decade or so, which Beijing has been enhancing and multilayering. But the last few years have brought a much more ambitious and expansive effort to establish new institutional contexts and platforms with longer-term goals and an elaborate approach, including policy and ideological concepts, norms, structures, and funding. This encompasses the four global initiatives in the areas of development, security, civilization and governance. They all aim to institutionalize Chinese leadership and constitute an alternative, wider international order that seeks to sideline Western-generated institutions. They are evolving, both in terms of membership and in the range of activities. Moreover, Beijing is demonstrating flexibility and agility in capturing and framing cooperation and regulation within the evolving landscape of international engagement, such as artificial intelligence.

The latest instance in this approach, the International Organization for Mediation (IOM), is of particular interest. The speed of its creation in just a few months has been impressive and indicative. Its ambition to establish a new framework for international dispute settlement by augmenting existing litigation and arbitration mechanisms is also noteworthy. These Chinese efforts are aimed at consolidating Hong Kong as the “capital of mediation,” leveraging its judicial history and financial position. The IOM is focused on international commercial disputes, and Beijing will seek to reinforce its centrality through various channels, including jurisdictional preferences in commercial and financial dealings. Many of its key partners are founding members, including Pakistan, Laos, Cambodia, Serbia, and Djibouti. The structure was established as an intergovernmental, multilateral body whose expanding membership will be focused on the “global South” to bolster its reach and legitimacy.

Three aims of alternative institutional frameworks

Earlier Chinese positioning instruments, such as BRI, were quite instrumental and transactional in their conception, oriented towards swift entry into new countries and markets. As its presence matured and its revisionist ambitions evolved, Beijing began to adopt a different approach. It sought to generate “soft power,” bringing China success relatively quickly. The prominence of “discursive power” in international affairs was also recognized as the country began to focus on narratives, imagery, and language.

Yet the Chinese authorities still faced the challenge of creating concepts, norms, and policies that actually gain traction and capture imaginations, institutions, and language. They addressed this task with an expansive range of responses. Some utilized the country’s ability to convene and create international platforms and initiatives, while others leveraged public diplomacy and media channels. The party’s ideology departments and academic and research institutions set up to craft novel policy concepts aimed at fulfilling the country’s global ambitions.

President Xi’s Global Civilization Initiative offers a comprehensive conceptual roadmap for a new world order as China envisions it. The Global Security Initiative (GSI) and the Global Development Initiative (GDI) attempt a similar task. The party leadership has developed a “Chinese narrative and discourse system” that is both internally and externally-oriented and guides messaging and imagery projections. Moreover, this is being implemented through numerous channels, including a network of 26 international communication centers. Furthermore, Beijing has been quite successful in formulating standards across numerous sectors and is in the midst of implementing its China Standards 2035 strategy. Artificial intelligence is among the current priorities for standardization at the national level. China has already proposed establishing a global AI cooperation organization. IOM is already performing a similar task in litigation, mediation and dispute settlement.

Secondly, the 16+1 cooperation platform between Central and Eastern Europe (CEE) and China, established in 2012, was an early attempt of Chinese diplomacy to engage the countries of the region. Beijing set up numerous sectoral frameworks focused on various areas of activity, such as culture, finance, transport, and agriculture, in the capitals of states from the region. These served to communicate and implement policies such as the Belt and Road Initiative and broader foreign policy goals, but also generated the first opportunities for socialization with China among local political, administrative, economic, and other elites. Exchange programs, short-term secondments, and familiarization trips sought to introduce Chinese policies, institutions, and practices to European audiences with little to no exposure to them. Yet such an approach was thinly institutionalized, insufficiently structured and quite ad hoc. Hence, Beijing needed a new generation of policies in this space.

Beijing’s proliferation of new international and bilateral institutions and frameworks is having a significant impact, transforming the frequency, intensity, and depth of engagement with other countries. This ranges from the increasing number of its global initiatives to the multiplication of bilateral initiatives and cooperation settings. The breadth of this socialization effort is also noteworthy as engagement is increasingly taking place functionally and by sector, for instance, in artificial intelligence, culture, youth, academic, agriculture, etc. One example is the association for the promotion of agricultural cooperation between China and CEE countries, which was created a decade ago but has increasingly become a self-standing platform. Moreover, these levels of cooperation involve individuals beyond the elite, creating additional opportunities to deepen ties. In this sense, Beijing is transitioning from a more ad hoc structuring of multilateral and bilateral dialogue towards a more systemic, sustained and routine institutionalization of interaction. This transformation is cultivating a deeper understanding and appreciation of Chinese thinking, attitudes, goals and norms.

Lastly, Beijing is increasingly capable of elaborating and structuring selective incentives to engage in various domains, including the economy and finance. This was evident in the establishment of the Asian Infrastructure Development Bank, which sought to gain a foothold in a central area of cooperation. This policy was further developed, albeit within a more complex framework, with the creation of the New Development Bank (the so-called “BRICS Bank”). Even more ambitiously, China seeks to establish a regional alternative to the World Bank among the members of the Shanghai Cooperation Organization (SCO). Work on the SCO Development Bank’s founding is accelerating. Moreover, President Xi is making interlinkages across various initiatives, connecting the creation of the new bank to the need for a new global governance infrastructure. While the latest efforts to generate selective incentives are more focused at the international and multilateral levels, Beijing’s ability to provide them at the national level is well-embedded and well-documented.

New policy and institutional contexts are linked with streams of financial support and lending facilities. For instance, the GDI is implemented through numerous measures and projects beyond policy-focused conferences and other events. Over 200 of them are financed via the “Global Development and South-to-South Cooperation Fund.” Additional funding channels for implementing GDI exist, for example, the China International Development Cooperation Agency, whose presence is also expanding. But there are other, more flexible and innovative ways of providing such incentives. One is the yuan’s increasing globalization, driven by the restructuring of foreign loans as China expands its lending positions. Another is promoting the use of the newly launched digital yuan. A third is the increasing emphasis on training and integrating businesses from other countries into Chinese e-commerce platforms, thereby generating trade opportunities and contacts between local firms and those from the “middle kingdom.”

Conclusion

Beijing’s revisionist ambitions are now well-embedded in its global approach and policies. After years of treading carefully and somewhat rudderless, its authorities are advancing with much greater confidence and clear direction. Within a decade or so, they have managed to capture numerous international organizations while mapping and clarifying their goals and instruments. Essentially, China is amidst a concerted wave of founding numerous platforms, initiatives and organizations which leverage its increasingly prevalent positions within the global political and economic system. It is basing these around communities of like-minded countries and partners and gradually expanding their scope and reach. Its toolbox of instruments is also being expanded through the production of concepts, policies, narratives, and norms. Through its leverage, Beijing is laying the groundwork for a bifurcated world.