China remains open to the world, but it wants to dictate terms

Chinese President Xi Jinping. Illustration / Rod Emmerson

After Australia dared last spring to call for an investigation into the origins of the coronavirus, China began quietly blocking one import after another from Australia — coal, wine, barley and cotton — in violation of free trade norms. Then this month, with no clear explanation, China left US$3 million worth of Australian rock lobsters dying in Shanghai customs.

Australia nevertheless joined 14 Asian nations and just signed a new regional free trade deal brokered by China. The agreement covers nearly a third of the world's population and output, reinforcing China's position as the dominant economic and diplomatic power in Asia.

It's globalisation with communist characteristics: The Chinese Government promotes the country's openness to the world, even as it adopts increasingly aggressive and at times punitive policies that force countries to play by its rules.

With the United States and others wary of its growing dominance in areas like technology, China wants to become less dependent on the world for its own needs, while making the world as dependent as possible on China.

"China wants what other great powers do," said Yun Jiang, a researcher and editor of the China Story at the Australian National University. "It wants to follow international rules and norms when it is in its interest, and disregard rules and norms when the circumstances suit it."

China's strategy is born out of strength. The coronavirus has practically disappeared within its borders. The country's economy is growing strongly. And China's manufacturing sector has become the world's largest by a wide margin, leaving other nations heavily dependent on it for everything from medical gear to advanced electronics.

China's Government is also pushing back against President Donald Trump and his administration, taking advantage of the political disarray that has followed his electoral defeat. Beijing's confidence on the global stage now compounds the challenge China will pose for the incoming administration of Joe Biden.

In a flurry of speeches over the last week, Xi Jinping, China's ambitious, authoritarian leader, laid out his vision for this new world order, while making clear his terms for global engagement.

A coal terminal in Hay Point, Australia. China has starting blocking Australian imports like coal. Photo / Matthew Abbott, The New York Times

Xi reiterated at the annual Asia-Pacific Economic Co-operation summit, an important regional forum, that the country had no intention of going it alone and "decoupling" its economy from the world. Appearing by video conference, he said China remained committed to opening up and would "play its part" to make the global economy "fairer and more equitable".

"Openness is a prerequisite for national progress, and closure will inevitably lead to backwardness," Xi said in remarks that seemed to take a swipe at Trump's America-first agenda.

At the same time, Xi is aggressively pushing for greater economic self-reliance at home — in other words, at least a partial decoupling. Xi has called for protectionist policies that would "comprehensively increase technological innovation and import substitution".

During a meeting with leaders of the Group of 20 nations this past weekend, he defended his new strategy to build greater self-sufficiency as a benefit to the global economy.

"While making the Chinese economy more resilient and competitive, it also aims to build a new system of open economy with higher standards," he said. "This will create more opportunities for the world to benefit from China's high-quality development."

Xi wants to tether other countries ever more tightly into China's economic and thus geopolitical orbit. In a speech to other Chinese leaders, recently published by a Communist Party journal, he called for Beijing to make sure that other countries remained dependent on China for key goods, as a way to ensure that they would not try to halt their own shipments to China.

Shipping containers in Yangshan Port in Shanghai. Xi Jinping is pursuing a strategy to make the country's economy more self-sufficient. Photo / Lam Yik Fei, The New York Times

Xi's own economic and political policies this year have been the mirror opposite. China's plan, Xi has said, is to lessen dependence on imports, insulating the country from rising external risks, including the threat of a long, pandemic-induced global economic downturn and the severing of Chinese access to American high-tech know-how.

In August, for example, the state offered a package of tax incentives for domestic semiconductor manufacturers, hoping to cultivate homegrown suppliers that can help reduce the nation's huge dependence on imported silicon. Beijing does not want other Chinese tech businesses to suffer the same fate as Huawei, the telecom equipment giant that the Trump administration has targeted since last year by restricting its access to foreign-made semiconductors.

Thousands of Chinese companies have since jumped into the chip business, though progress is likely to be slow. Making advanced chips requires expertise and technological mastery that money alone cannot buy.

Xi's strategy, of course, grew out of the Trump administration's intensifying efforts to isolate China, which show no sign of waning in its last weeks. Since the election, the administration has barred investment in Chinese businesses with military ties; imposed more sanctions on Chinese officials for their role in cracking down on Hong Kong; and further engaged with Taiwan, the self-ruled island claimed by China.

American secretary of State Mike Pompeo said recently that countries now faced a choice between "barbarism on one side and freedom on the other".

"We've woken them up to the threat posed by this Marxist-Leninist monster," he said.

Secretary of State Mike Pompeo argues that China poses a great threat to the global order. Photo / AP

In the Asia-Pacific region, few governments view the choice so starkly. With many of them more dependent on trade with China now than with the US, they cannot easily turn away. China, by far, is the largest market for Australia's goods, buying nearly 38 per cent of its exports; the US accounts for 4 per cent.

"The world as it exists today cannot be reduced to the rivalry of superpowers," Laurent Bili, the French ambassador to China, said at a conference organised last week by the Centre for China and Globalisation, a Beijing research group.

Trump's go-it-alone approach has given China an opening to portray itself as the champion of globalisation. In Beijing's argument, it is the US that has now retreated by trying to restrict Chinese investments.

China is not only trying to capitalise on American political disarray but also to repair the damage that the pandemic has caused to China's image, especially in Europe.

"The United States is still in electoral chaos, while China is forming the world's largest trade agreement," the Ministry of Commerce in Beijing wrote on its official website recently.

State media has struck a similar chord, trumpeting China as the defender of the global order. An opinion article by state broadcaster CGTN was blunt, warning that those who would cut off links with China "are likely to end up on the outside of the world's economic gravity".

President Donald Trump's "America First" foreign policy has provided China with an opportunity to take more of a leading role in world affairs. Photo / AP

Australia and New Zealand are quickly learning to navigate this new world order, as dictated by China.

Australia has effectively blocked the purchase of Huawei 5G telecommunications gear for its national network and has become increasingly outspoken on China's domestic politics. It joined New Zealand, the US, Britain and Canada — the so-called Five Eyes nations — in a statement last week calling on Beijing to rescind its recent disqualification of pro-democracy legislators in Hong Kong.

The riposte from China's foreign ministry was swift. "Be careful lest eyes get poked blind," warned Zhao Lijian, a foreign ministry spokesperson, at the ministry's daily briefing on Thursday.

China has repeatedly targeted Australia by blocking a grocery list of exports, often with no formal explanation.

Australia went ahead anyway with the new trade agreement on Sunday in the hope that binding China in international agreements would affect its behaviour — a position that has disappointed countries over and over.

Just a day later, officials at China's embassy in Australia delivered a 14-point list of grievances to three news organisations, citing Australian foreign interference laws seen as aimed at China, the ban on Huawei and other investments, and its diplomatic "crusade" against Chinese policies in Taiwan, Hong Kong and Xinjiang.

"China is angry," one embassy official explained to the Sydney Morning Herald. "If you make China the enemy, China will be the enemy."

Written by: Steven Lee Myers and Keith Bradsher
Photographs by: Lam Yik Fei and Matthew Abbott
© 2020 THE NEW YORK TIMES