Geopolitical Report ISSN 2785-2598 Volume 24 Issue 7
Author: Riccardo Rossi
On October 16th, 2022, Xi Jinping opened the 20th Congress of the Communist Party of China (CPC) in a speech lasting about two hours, outlining the main challenges that the People’s Republic of China (PRC) will have to face in the coming years to pursue the China Dream policy design. The analysis of Xi Jinping’s speech can make understand Beijing’s foreign and domestic policy in the future.
Is the beginning of the Chinese century?
In his speech, the Chinese President identified the need to modernise the country to return it to a prominent international role and a leading state in Asia-Pacific.
The nation’s modernisation passes through a strengthening of the industrial apparatus, which is essential for expanding the domestic market, homogenous economic growth across the country, and designing new technologies for military and civil purposes. In this regard, last year, Beijing launched the 14th Five-Year Development Plan (2021-2025), regulating industrial development for the coming years and identifying three main areas of interest:
Beijing gives the research and development sector (R&D) an indispensable role in designing new military (as with the Chinese Type 3 aircraft carrier launch in 2022) and civil technologies. The Made in China 2025 and Internet Plus projects can be considered in support of this assessment. The former, unveiled in 2015 by Chinese Prime Minister Li Keqiang, identifies ten industrial sectors of high strategic relevance: (1) new energy vehicles, (2) next-generation information technology (IT), (3) biotechnology, (4) new materials, (5) aerospace, (6) ocean engineering and high-tech ships, (7) railways, (8) robotics, (9) electrical equipment and (10) agricultural machinery.
The People’s Republic of China, referring to the Internet Plus programme, intends to improve the quality of mobile Internet networks in the country by designing a new, high-performance cloud computing and big data system.
The realisation of Made in China 2025 and Internet Plus are instrumental in achieving technological self-sufficiency, i.e. independence from the support of foreign companies for the completion of new electronic components.
Open trade, fossil resources and green economy
Beijing wants to increase both the size of the domestic market and the presence of state-owned multinationals in the African and European markets and some states of the Asia-Pacific region.
In recent years, Beijing has tried to boost the domestic economy by launching the 13th (2016-2020) and 14th (2021-2025) five-year development plans, promulgating welfare policies and building infrastructural works (railway networks and highways) to facilitate the movement of goods and people from the large metropolises to underdeveloped rural areas. To increase the presence of large state-owned industrial groups in the African and European markets and in some Asia-Pacific countries, such as Vietnam and Myanmar, the Xi administration had to implement the One Belt One Road and 21 Maritime Skill Road.
Xi Jinping addressed the issue of the industry’s excessive dependence on fossil energy resources (primary oil), mainly from the Gulf countries, Brazil, and the Russian Federation. From this observation, Beijing has re-evaluated the geo-economic value of renewable energy sources, as seen with the increased exploitation of water resources in the Upper Tibetan Plain, building a complex network of hydroelectric infrastructures, including the Three Gorges Dam.
In this framework, the state banking system plays a decisive role as the leading financier. The most important commercial banks are the so-called Big Four:
- Bank of China (BOC), whose main activities involve commercial banking functions, i.e. corporate banking, services to private customers, foreign currency investments and foreign transactions.
- Chinese Construction Bank (CCB) provides medium- to long-term credit for infrastructure projects.
- Chinese Agricultural Bank (ABC), specialising in credit for the agricultural sector and rural economy.
- Chinese Bank for Industry and Commerce (ICBC) is one of the world’s largest banks, founded on January 1st 1984, by the Chinese government, with a capital of 20.8 billion yuan.
To protect internal order and state security, the Chinese Communist Party leadership has repeatedly targeted the secessionist movements in the autonomous regions of Tibet and Xinjiang as a potential threat to the PRC’s state integrity and energy security, given the large concentrations of fossil and water resources in Xinjiang and Tibet.
In Xinjiang, there are large deposits of oil (amounting to 23.4 billion tonnes), gas (amounting to 13,000 billion m3 and accounting for 23.3% of all the nation’s onshore gas resources) and 24 coal mines totalling approximately 10 billion tonnes.
In Tibet, there is one of the highest concentrations of fresh water on the planet, which Beijing considers essential as an energy resource and for supplying the agri-food industry.
Due to the geo-economic importance of the two autonomous regions, Beijing has used the People’s Liberation Army to maintain control over the population and spread the Chinese language and culture among the locals. In addition, China has strengthened relations with Central Asian countries bordering Xinjiang, such as Tajikistan.
China’s Strategy in the Asia-Pacific
Preserving state security and fostering economic-industrial development are necessary conditions for increasing the weight of the People’s Republic of China in the international system and the Asia-Pacific region.
Beijing recognises essential areas within the China Sea geo-maritime space, such as the Hong Kong Special Administrative Region, the Korean peninsula and the maritime narrowing of Taiwan, Miyako, Luzon, and Malacca.
In Beijing’s foreign policy, Hong Kong is an essential financial hub, acting as a platform for the interaction of domestic and foreign capital, facilitating in part the growth of the domestic market.
In recent years, the PRC has pushed its multinational companies to increase their investments in the HKSAR stock exchange. This forced the CCP leadership to counter the growing anti-Chinese movements through a repressive policy until Xi Jinping’s presidency promulgated the National Security Law (NSL) on June 30th, 2020, which violated the Hong Kong Declaration ratified in 1984 with the United Kingdom.
China, in agreement with the Russian Federation, strengthened its diplomatic presence on the Korean peninsula to maintain tight control of Pyongyang’s economy and nuclear missile development.
The objective of this Sino-Russian operation is to preserve a stable condition in Korea by maintaining a preferential diplomatic channel with the Republic of Korea and Washington. With this action, President Xi Jinping believes he can reach peaceful resolutions to Pyongyang’s continued aggressive manoeuvres towards Seoul.
In addition to Korea, China identifies the Taiwan Straits and Miyako (part of the Japanese province of Okinawa) as two geo-maritime areas of vital interest to Chinese interests in the East China Sea. Both structural elements of the First Island Chain’s northern segment represent two obligatory passages for the most crucial maritime communication lines in the Asia-Pacific region, interconnecting the Chinese port network to the African and European markets.
In his speech to the 20th Congress of the CPC, Xi Jinping recalled Beijing’s desire to annex Taiwan to its territory.
In Beijing’s strategic vision, a possible occupation of Taiwan would counter Washington’s potential threat to Chinese cities along the coastline. It would also allow Chinese control of the maritime traffic interconnecting the East China Sea with the South China Sea and increase operations to survey and exploit fossil resources (oil and gas) in the East China Sea seabed.
Analysing Xi Jinping’s speech, it is possible to say that Beijing will speed up the implementation of the China Dream project in the coming years. This means that, as far as domestic policy is concerned, it will expand higher investments for the implementation of the 14th industrial development plan while at the same time maintaining tight control over the ethnic minorities in Xinjiang and Tibet to preserve access to essential resources to satisfy the industrial sector’s thirst for energy partially.
In this context, Beijing’s main foreign policy challenge remains increasing the PRC’s weight in the international system and the Asia-Pacific region.
In Asia-Pacific, the issue of Taiwan’s reunification will be one of the most critical challenges facing Beijing, which could lead to an armed confrontation against the US Pivot to Asia policy.