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Chinese President Xi Jinping shares a toast with his Russian counterpart Vladimir Putin on the sidelines of the Eastern Economic Forum in Vladivostok, Russia, on Sept. 11.    © AP
Cover Story

China turns on the charm as US tensions grow

Beijing seeks more trade with Southeast Asia, Japan and Russia

NANNING, China -- As U.S. President Donald Trump prepared a major escalation of his trade battle, China's leaders were engaging in a charm offensive meant to keep the country's friends close -- and pull its rivals closer.

Vice Premier Han Zheng, one of the most powerful members of Beijing's political machine, opened an annual gathering of officials and business people from the Association of Southeast Asian Nations on Sept. 12 by saying their relationship with China could be an "exemplary model of common destiny of mankind."

He also appeared eager to dispel growing criticism that China's aid -- sometimes called "debt diplomacy" -- only benefits itself.

"China welcomes ASEAN countries to get on the express train of Chinese economic development and is eager to share the fruits," he said at the meeting, held in the southwestern city of Nanning. Among the guests was Prime Minister Hun Sen of Cambodia, who has developed deep ties with China.

The focus on ASEAN makes sense: The group represents China's third largest trading partner, only after the EU and the U.S. It accounts for 12% of China's total trade, but it grew by 19% during the first eight months of this year.

While Han was entertaining China's guests from the south, President Xi Jinping headed north to Vladivostok to attend the Eastern Economic Forum hosted by Russian President Vladimir Putin.

Xi's first visit to Putin's pet event reinforced a message that he was eager to enhance ties with China's neighbors in the Russian Far East. With Western sanctions still isolating Russia four years after its annexation of Crimea, Xi is reaching out to Putin.

Russia ranks 13th among China's trading partners, but the trade value has grown by 26% this year so far, outpacing the 13% increase with the EU and the U.S.

During his visit to Vladivostok, Xi also met a leader he has had a frostier relationship with: Japanese Prime Minister Shinzo Abe. "We have a common understanding to always develop Sino-Japanese relationship," Xi said, wearing a rare smile. Japan has been an easy punching bag for the Chinese leadership when it wants to divert attention from problems at home, but at this stage, Xi seems to see value in befriending Tokyo.

Just a week before the Russia meeting, Xi invited African leaders from 53 countries to Beijing and pledged $60 billion of fresh financial aid. During the conference, Xi pointed to the "existence of hegemonism and power politics, rise of protectionism and unilateralism," though he stopped short of naming the U.S.

He also stressed China's "five-no" policy, which includes promises not to interfere with internal affairs and not to attach any political conditions to its aid money.

Back in July, Chinese authorities released Liu Xia, widow of the 2010 Nobel Peace Laureate Liu Xiaobo, accommodating calls from Chancellor Angela Merkel of Germany and other EU leaders, after keeping her under house arrest in Beijing for eight years for being the wife of a dissident.

And in April, Xi invited Indian Prime Minister Narendra Modi to Wuhan to normalize relations after a border confrontation last summer that lasted over three months.

"This trade war should be looked at from a broader geopolitical perspective," Kevin Lai, chief economist at Daiwa Capital Markets in Hong Kong, told the Nikkei Asian Review.

From Beijing's perspective, the Trump administration's objective is to "contain China, once and for all."

The Chinese official media is using phrases such as "war of attrition" these days to prepare the public for a prolonged dispute. Their outreach to other nations seems to reflect the view that the trade headaches may worsen before they get better.

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