The challenges of an inward-looking China on the world stage

The world this month was watching closely the congress by the Chinese Communist Party, and for good reason. It was a major moment to state China’s key priorities. But it was no surprise that domestic issues – economic growth, health care, education, environment – necessarily were the foremost focus of the event. That is because President Xi Jinping and the party – like any other national leader – need to address the concerns of the country’s domestic audience before anyone else. And so the Congress started with a long address by Mr Xi, who gave each of these areas copious treatment. Despite this, the sheer enormity of the country that Mr Xi leads – reappointed leader for a third term – means that even the seemingly most domestic issues have an international dimension. What China is planning to do on combating climate change, for instance, matters hugely to everyone else, as does how it chooses to deal with pandemics (something we have witnessed in the past two years). China is now like the US at least in this respect: its internal issues are intrinsically global, and what it does in terms of policy and management has a knock-on effect on the world around. One thing we can be fairly certain about. A third term for Mr Xi, from this year until 2027, would almost certainly be about continuity and in that sense, at least, it will offer some level of predictability. The Communist Party may be a revolutionary political force, but the older it gets, the keener it becomes on routine and foreseeable outcomes. Almost every single declaration and commitment the Chinese government has made over the past five years has been about assisting the country to deliver its vision, under party leadership, of being a powerful, strong, rich country. Nothing will be allowed to scupper or put this at risk. The question remains, however, as to how the rest of the world fits into this grand, overarching vision, one which is intrinsically where the domestic and the international get mixed up. That is where the uncertainty most intensely exists. This is because areas of Chinese and foreign co-operation, from security to economy to sustainability, mix collaboration with competition and sometimes pure conflict, and will continue to need complex management and vigilance to deal with. This is, to put it lightly, because much of the rest of the world has a far more ambiguous or even antagonistic view of the creation of a powerful, strong China than China itself does. On an issue such as that of working together on the environment, work is very much at the collaboration side of the spectrum. China’s rivals in America, Europe and elsewhere can console themselves with at least one thought: that while the Xi approach to the world is nationalistic and assertive, at least on perhaps the most critical issue or our time, they are dealing with a leader who speaks broadly the same language as them. With its energy-intensive, fossil-fuel-heavy economic model, China introducing changes in this area will have a huge impact on the rest of the planet reaching their goals of keeping temperature increases down. If China manages to achieve this, then the Xi era will historically go down as a vastly significant one, whatever other challenges may unfold. For environmentalism, in Mr Xi China has a leader who can, and probably will, cut a deal with the rest of the world. But on most other issues, however, things are not so straightforward. On Hong Kong, there has been no rollback of increased control over the city since 2019. The one country, two systems implantation is clearly regarded as fine by Beijing, and as long as Hong Kong citizens are also patriotic Chinese, they have nothing to fear. For Taiwan, the main message in 2022 has been for the rest of the world to keep out of this issue. This is unsurprising. China remains worried that its hand might be forced by adventurous notions in America and elsewhere that might prompt some to either recognise Taiwan independence, or encourage political leaders on the island to pursue it. This is the reddest of red lines for the People’s Republic. On economic issues, however, things are, for the present, less clear for China than the outside world. Under Mr Xi, China is seeking what might best be described as technological autonomy. The government has promised to put significant investments into improving universities and making China both an innovator and producer of more and more of the technology it needs. This is not a new theme but is being delivered with an increasingly strong sense of commitment and urgency. The main question is, in view of the very tough economic challenges facing China and the world now, from a vexed housing market to supply chain issues, slowing growth, rising youth unemployment, all compounded by the situation in Europe and the US, can the country really pull this off? Necessity is the mother of invention, for sure, and in many other cases, government support for research and development is key. But China is clearly trying to go its own way far quicker than it might have wanted, with the US and others implementing more restrictions on where, and how, research collaboration with China can happen. For Xi Jinping and the vision to deliver a great powerful country in the next few years, it is clear that his country’s dilemma is the same as that of most others – wanting to be more independent and free, and yet working in a context where the biggest issues involve deeper and deeper levels of collaboration. This underlying reality should not be forgotten. Chinese leaders from Mr Xi downwards talking about China’s pride, strength, and sovereignty are always going to be popular with the home audience, while at the same time creating unease and apprehension in the outside world. This lack of alignment is a challenge Beijing will struggle with as it attempts to implement its ambitious and comprehensive programme, acknowledging that it will only be able to do this if it has assistance from the rest of the world, including nations whose rivalry with it is only growing.