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China’s Evolving Foreign Policy

Past Diplomatic Practices Collide with Rising Economic and Political Realities

SOURCE: AP/Damian Dovarganes

Chinese Foreign Minister Yang Jiechi, left, talks with U.S. Vice President Joe Biden at a luncheon on in February. China's historic nonintervention foreign policy strategy is changing as it becomes a more prominent world power.

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In a move that sparked international condemnation and anger, China and Russia on February 4 vetoed a U.N. Security Council resolution condemning the Syrian government’sbrutal crackdown on antigovernment protestors. Reflecting widespread sentiment, Secretary of State Hillary Clinton said, “What happened yesterday at the United Nations was a travesty.” Out on the streets Syrian and Libyan protesters responded to the veto by spraying graffiti on the walls of and throwing rocks and eggs at the Chinese Embassy in Libya.

Chinese diplomats view their veto of the Syria resolution as part of their long-standing foreign policy principle of “non-interference in other country’s internal affairs” (bu ganshe neizheng). Since the 1950s this principle helped China maintain a low profile on the global stage, economize on military spending, maximize the resources directed toward domestic economic growth, and build foreign policy relationships with a wide variety of regime types.

Times are changing, however, and in recent years noninterference is just as likely to bring major international condemnation—not only from the Western powers, but also from the citizens of developing nations that would traditionally have supported this approach. The primary reason for this shift is China’s economic expansion. Chinese companies are interfering in other countries as never before—pulling Beijing into relations with frequently unstable regimes around the world—which today pits China’s traditional foreign policy principle of nonintervention against the reality of its economic interests in the 21st century.

How will Chinese foreign policy change as a result of these new tensions? This issue brief examines specific instances abroad where Chinese actions or investments are causing the breakdown of the nation’s once-determined noninterventionism. We then look at the pressure to change its foreign policy in more detail—both within China and around the world—before sketching out where we think China may end up in the coming years.

The history of China’s noninterventionist foreign policy

The principle of nonintervention in the domestic affairs of other nations dates back to the 1950s, when China’s revolutionary zeal and firm position in the communist bloc left it facing an increasingly hostile international environment. Foreign policy tensions drained resources, whether in the form of wars or the limitations on economic interaction with its noncommunist neighbors. Chinese leaders responded with a new strategy that would allow them to economize those resources and focus on internal development. China began to build partners within the global nonaligned movement by promoting nonintervention in the domestic affairs of other nations—in stark contrast to the Soviet Union’s stated policy of internationalizing the socialist revolution or America’s stated policy of promoting democratic movements worldwide.

Noninterventionism took on new importance under Deng Xiaoping beginning in the late 1970s because of Deng’s emphasis on a “low profile” foreign policy so that China could focus exclusively on internal economic development. Chinese leaders felt that an over-engaged foreign policy could hamper China’s economic needs by either restricting the country from key trading partners or by prioritizing military spending over economic investment. Indeed, many emerging economic powers, including India, Brazil, South Africa, and, up until the Arab Spring, Turkey, adopted noninterventionist policies for similar reasons.

China’s nonintervention principle also serves the domestic political interests of the Chinese Communist Party. The Chinese government is an authoritarian regime itself, and if its own citizens rise up in regime-threatening mass protests, then it does not want foreign governments intervening in its domestic affairs and using sanctions or other international policy levers to make it harder for Beijing to maintain internal cohesion and control. Chinese leaders used the same nonintervention language to criticize the international sanctions that followed the 1989 Tiananmen protests. Deng Xiaoping responded to post-Tiananmen sanctions by stating that foreign governments “were not qualified to punish China” for the Tiananmen crackdown, and that Chinese leaders “would never permit other countries to interfere in China’s internal affairs.”

More recently, Chinese leaders have used this same language when warning the United States not to interfere in Tibet, Xinjiang, or Taiwan. A Chinese Foreign Ministry spokesman referred to a U.S. law promoting international religious freedom, seemingly targeted at Chinese crackdowns in Tibet, as “wanton interference in China’s internal affairs under the pretext of religious freedom.” Similarly, Chinese Vice Foreign Minister Zhang Zhijun referred to President Barack Obama’s decision to upgrade Taiwanese F-16 fighter jets as “a serious intervention in the internal affairs of China.”

For the most part this approach has enabled Chinese leaders to keep a low-profile foreign policy and to avoid the diplomatic disputes and resource-draining conflicts that frequently characterized Western and Soviet foreign policy during the Cold War.

As a permanent member on the U.N. Security Council, China has generally opposed interventions, but tried to do so quietly by abstaining instead of by vetoing international action. The recent Syria vote was only the eighth time since the People’s Republic of China joined the U.N. Security Council in 1971 that China used its veto power, as compared to 123 times for the Soviet Union/Russia and 82 times for the United States.

China's U.N. Security Council vetoes

China’s rising economic engagement abroad makes noninterference problematic

Chinese economic development surged over the past 30 years, leading its business communities— state-owned enterprises and private companies alike—to expand more and more into the global economy as part of the Communist Party’s “going out” strategy, which encourages international investment by Chinese companies. Amid this changing reality, China attempted to maintain its traditional policy of diplomatic and military nonintervention—even as Chinese businesses engaged in greater economic intervention in the very same areas where the international community seeks to politically or militarily intervene. These economic interests may force China to rethink the wisdom of a nonintervention policy in the long term as it becomes more difficult to maintain.

Since the economically reform-minded Deng Xiaoping asserted control over the Chinese leadership in the late 1970s, China’s gross domestic product—the largest measure of all goods and services produced in China—has grown from $148 billion in 1978 to $5.9 trillion in 2010 in current U.S. dollars.10 China has undergone a corresponding increase in its energy consumption rates, turning from an energy-exporting nation in 2001 to one of the largest importers of oil, coal, and natural gas, overtaking the United States in total energy consumption in 2009.

Growing bigger, consuming more

In order to satiate the economy’s growing demand for oil, export markets, and natural resources, Chinese companies have frequently made business deals with pariah states such as Sudan, Iran, and North Korea—where they face little to no competition for market access from Western companies—as well as with nations that are eager to snub their noses at Western investment, among them Venezuela, the Central African Republic, and the Democratic Republic of the Congo.

Energy investments in particular caused Chinese state-owned enterprises to develop close ties with rogue and unstable nations because the best energy contracts in more stable energy-producing states have already been secured by other multinational energy companies. Instead of buying straight from the international oil market like most countries do, Chinese state-owned companies such as Sinopec attempt to lock in long-term energy contracts at a set price, thinking that this will insulate them from market shocks and foreign attempts to shut China out of the oil market during a military conflict. But most energy experts agree that contracts will not guarantee the price of oil, and that China is wasting money trying.

Chinese foreign direct investment stock in oil-rich Iran, Algeria, Nigeria, and Sudan in 2010 was valued at $3.4 billion, while foreign direct investment, or FDI, stock in mineral-rich South Africa, the Democratic Republic of the Congo, and Zambia was valued at $5.7 billion. Those seven relatively unstable countries accounted for 12 percent of the value of all Chinese FDI stock worldwide in 2010.

When these nations do not abide by international laws, they are scrutinized by the international community and subject to various forms of reprobation. When China refuses to participate in economic sanctions or international condemnation of these states, noninterventionism simply looks like a pragmatic and at times ruthless decision to protect its own economic interests rather than a benign respect for the sovereignty of other nations.

This was on display most recently in Syria. When the U.N. Security Council sought to condemn strongman Bashar al-Assad’s regime for brutally suppressing protestors, China joined Russia in vetoing the resolution. Chinese leaders used the same language of noninterference and respect for the sovereignty and independence of other countries and citizens to defend the veto.

Chinese diplomats voiced particular concerns that Western nations were using civilian protection to cover up their true motives for regime change in Damascus. Chinese state media cite last year’s Security Council-approved Libya intervention as the primary driver of Chinese suspicions, claiming, “NATO abused the Security Council resolution about establishing a no-fly zone, and directly provided firepower assistance to one side.”

But this time China’s noninterference approach triggered a severe backlash and international condemnation. Few were on China’s side, even in the Middle East, where citizens accused China of protecting the Assad regime. Now, China’s refusal to get involved in these sorts of international disputes and its blanket opposition to regime change draws Beijing into the center of these international crises. Attempts by protesters to tear down the Chinese flag from the top of its embassy in Libya, for example, shows noninterventionism has been anything but low-profile in recent years for Beijing.

This is part of a growing trend in recent years in which Chinese involvement in these regimes has led to accusations of protecting dictators and funding genocide. In Sudan international outcry against state-owned oil company PetroChina led to a 70 percent reduction in the value of its initial public offering on accusations that the initial $10 billion raised would help fund the genocide in Darfur. Attempts by three Chinese arms manufacturers to sell rocket launchers, antitank missiles, and other weapons to Muammar Qaddafi’s forces in Libya after the United Nations had authorized a no-fly zone and imposed strict sanctions on the regime is the most recent—and one of the most egregious—examples of China’s refusal to participate in international sanctions.

The toll even begrudging Chinese support for pariah states is having on its global image is beginning to outweigh the economic incentives of engaging in energy development or resource extraction in these countries, and pressure is beginning to mount to correct this imbalance.

The growth of international and domestic pressure to embrace a different kind of foreign policy

China’s growing amounts of international investments, often in unstable parts of the world, are raising the diplomatic costs associated with its noninterference approach. The international community increasingly expects China to play a role as a global leader, regardless of how China’s foreign policy theory defines its own role. The importance of China’s economic relationship with many of the countries at the center of international disputes puts a spotlight on what Beijing is doing on the ground economically in these nations, as opposed to what it is doing for the people of these nations.

As the most populous country on the planet and the most dominant nation in Asia, China is a heavyweight in the international arena, but it is still “punching below its weight,” to borrow a still-relevant metaphor from a 2009 report on Chinese engagement. The quantity of Chinese engagement in the international system is not under debate. China is a regular and seriously engaged participant in international institutions, but the quality of Chinese engagement is still lacking in the eyes of the international community.

This is not to say that Chinese global leadership has not improved in the past few years. China’s recent actions on the global economy during the Group of 20 meetings of developed and developing nations—particularly expanding funding for the International Monetary Fund and agreeing to a process of mutual macroeconomic assessment—were welcomed by the United States and the world’s other major economies.Similarly, at the Durban climate change conference in November 2011, China signed onto a roadmap that will establish a legal deal by 2015 to cut global carbon emissions. These steps were not easy for China to take and should be commended by the international community.

Yet even as China becomes a global stakeholder, Beijing continues to show reluctance in its new role and wishes to avoid the frequently heavy responsibilities of global leadership. For instance, U.N. sanctions against North Korea, Sudan, and Libya—which have overwhelming international support—have been unevenly enforced by China at best and overtly flaunted by China at worst. China remains unwilling to share the burden of reforming the U.N. Security Council or promoting the principles of the U.N. Declaration on Human Rights, among others.

But this resistance to the responsibilities of global leadership is becoming increasingly untenable. International pressure for China to act like the global power that it is more and more frequently puts Chinese diplomats in a difficult position. Chinese leaders are extremely uncomfortable being isolated by the international community on an issue. Yet every time Chinese diplomats are perceived as defending a discredited regime or as protecting Chinese economic interests in an unstable country at the expense of the civilians in that country, China’s global image is weakened. This is leading some in China to question whether this approach still serves China’s national interests.

China’s own citizens, too, are demanding action, largely because China has proven itself unable to protect its citizens and assets abroad in many situations in recent years. The Chinese model of economic expansion means not just an increasing flow of Chinese yuan or materials overseas but also a substantial number of Chinese workers sent abroad to work on investment projects. The number of Chinese nationals working abroad doubled from 2002 to 2011, when China sent 812,000 workers abroad.

Chinese workers and equipment abroad are highly vulnerable to the changing tide of current events in many places prone to violence and unrest. Approximately 35,860 Chinese nationals had to be evacuated from Libya after the civil war broke out in 2011. Several billion dollars in investments were either lost or destroyed in the same conflict. China Railway Construction Corporation alone had to leave behind $4.24 billion in unfinished projects and equipment in Libya.

But civil wars and general instability don’t represent the only threat to Chinese workers and cargo. Pirates and kidnappers increasingly view Chinese assets as easy targets. In a four-day span this past month, 54 Chinese workers were kidnapped in Egypt and Sudan, adding significantly to the more than 100 other Chinese citizens taken hostage abroad in the past five years, in places from Afghanistan to Nigeria.

China’s limited ability to protect its citizens and assets have become a key issue of concern among Chinese citizens, who are at turns embarrassed, enraged, and confused by the government’s inability to do anything in these situations.

Increasing frustration over China’s lack of response to incidents is leading to a changing public consensus on China’s nonintervention policy. While challengers to the policy may remain in the minority for now, the chorus of citizens calling for a more active, engaged foreign policy is growing, particularly among China’s elite and its urban middle class. Even the Communist Party’s official newspaper, the People’s Daily, released an op-ed that called for increasing China’s overseas security capabilities. A recent Sino Weibo poll conducted by the ultranationalist Global Times found that a majority of citizens opposed China’s veto of the Security Council resolution on Syria, leading a shocked and angered Global Times reporter to question how so many Chinese citizens could support the West’s position on Syria.

After the Syria veto: What’s next for China?

Recent years offer plenty of evidence that a stable, rules-based international system provides Beijing with the best environment for steady economic growth. Chinese companies and citizens abroad will continue to be threatened by regimes, states, and nonstate actors who do not abide by international law.

These international diplomatic realities are going to increasingly clash with China’s lingering noninterventionist foreign policy predilections and its growing economic investments abroad. There are several steps China could take to respond to the growing imbalance between its economic interests and its ability to protect them. Based on recent Chinese actions, two steps appear likely. In the short term Chinese companies may shift their “go-out” resource investment strategy to more accurately account for political risk. Over the longer term, the Chinese government may also expand the assetprotection mission of the People’s Liberation Army.

The role of the country’s military in protecting Chinese interests is beginning to change. China is expanding its role in counterpiracy efforts in the western Indian Ocean, often working closely with the U.S. Navy and other NATO navies to protect shipping lanes as part of Operation Ocean Shield. In February 2012 the Chinese Naval Command College began its first officers training course on counterpiracy missions in the hope of establishing greater expertise throughout the People’s Liberation Army Navy on these types of operations.

But China does not yet have the capacity to regularly participate in these types of international missions. China currently maintains a strong green-water navy capable of effectively protecting its territorial waters and conducting offshore missions but is in the process of modernizing its fleet, complete with an aircraft carrier, which would allow it to conduct more open-ocean naval operations. Modernization of the Chinese fleet would extend the People’s Liberation Army Navy’s power projection capabilities far beyond just the South China Sea—a prospect that would further complicate U.S.-China military-to-military relations.

China has also floated the possibility of establishing a series of naval bases across the Indian Ocean, including bases in the Gulf of Aden and the Seychelles. The U.S. Department of Defense notes that the momentum within China to move from an “offshore defense strategy” to a “far seas defense strategy” implies that China may reverse its stated policy against overseas basing in the future. A global military expansion by China is not necessarily the only tool the Chinese government has to rectify the tension between its global interests and its nonintervention preferences. The nature of the current crisis may be more influenced by a change in the country’s economic behavior.

Though China’s economic investments in the energy sector remain heavily dependent on volatile states in the Middle East and Africa, recent energy deals by Chinese national oil companies show an increasing diversification of their crude oil and natural gas supplies away from the most volatile states of the region. Chinese companies have invested heavily this year in the more stable Gulf monarchies of the Middle East—as seen in Sinopec’s plans to build a $10 billion, 400,000 barrel-a-day refinery in Saudi Arabia and the Chinese joint venture refinery with Qatar Petroleum International.

China has further diversified its energy supplies by reaching out to energy suppliers outside the Middle East and Africa through investments in Latin American nations such as the significantly more stable Brazil and the slightly more stable Ecuador, Bolivia, and Venezuela since 2009. These are part of China’s long-term oil and gas for loans deals such as the 2009 agreement to loan Brazilian Petrobras $10 billion in exchange for roughly 100,000 barrels of crude oil per day. Lastly, Chinese companies are investing heavily in transnational pipelines to pump in Russian oil through Heilongjiang province, Kazakh oil and Turkmen gas through Xinjiang province, and Burmese gas through Yunnan province.

The growth of Chinese energy deals with more stable countries and the increasing diversification of their energy supply have coincided with a notable slowing of the energy relationship between Iranian and Chinese companies. Chinese Unipec plans to cut 10 percent to 20 percent of its crude oil imports from Iran under 2012 supply contracts—these cuts come on top of major import reductions by China’s Zhuhai Zhenrong Corp. earlier this year. Other Chinese national energy companies have slowed or halted on multibillion-dollar Iranian energy development projects such as the North and South Pars gas field and the Yadavaran oil field. As its largest buyer, China’s decision to reduce crude oil imports from Iran represents a major blow to Tehran’s finances.

Chinese energy investments are still overly concentrated in volatile states and are vulnerable to political risk in the Middle East and Africa, but the increasing diversification of its energy supply does reduce China’s dependence on any particular state and opens up a wider range of options China can take in an international dispute. Chinese leaders haven’t stated any interest in reducing China’s ties to countries such as Sudan or Iran, but as noted in a previous American Progress column on China’s relationship with Iran, “actions speak louder than words.” It is possible that energy diversification could be a key component of the Chinese government’s economic strategy to address the current imbalance between its economic interests and its ability to protect them.

China is also distributing increasing amounts of foreign aid, often to the same countries and regions it is working with on energy and resource deals. China’s annual foreign aid budget tripled during the 2000s, from $450 million in 2000 to $1.4 billion in 2007. And that number continues to rise. By the end of 2009 China distributed $37.5 billion in grants, interestfree loans, and concessional loans since the founding of the People’s Republic, according to a white paper on foreign aid by the State Council. Chinese leaders hope better public relations and increased foreign aid can mitigate the damage to China’s image as it operates in the resource-rich but politically unstable nations of Africa and the Middle East.

The Libya operation and the Syria veto have shown China that it is out of step with much of the international community, and that its current foreign policy framework requires a course correction. No one expects China to abandon its foreign policy principles or its diplomatic style, but China can’t play a constructive role in the international system while maintaining a pure policy of nonintervention. Whether China fills its potential to become a sophisticated global player remains to be fully seen, but either way Beijing’s days of sitting on the sidelines during an international crisis are officially over.

Ken Sofer is a Research Assistant with the National Security and International Policy team at American Progress.

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