May 18, 2017 10:00 am JST

China's Xi aims for two birds with one stone

Belt and Road Forum polishes the country's image and boosts president's power

TETSUSHI TAKAHASHI, Head of Nikkei's China Headquarters, SHUNSUKE TABETA, Nikkei Staff Writer

BEIJING Looking satisfied and no doubt enjoying his moment in the international spotlight, Chinese President Xi Jinping feted delegates to his country's vision of a huge economic zone linking China to Europe during the Belt and Road Forum on May 14 and 15 in Beijing.

Ostensibly held to promote China's Belt and Road Initiative, which would create a modern-day Silk Road, the timing of the event implied that Xi's underlying aim was to ensure that this fall's National Congress of the Communist Party is a success, with him as the main benefactor.

Addressing some 1,500 people from about 130 countries and more than 70 international organizations, Xi reminded attendees of the benefits from increased trade. "The ancient silk routes witnessed the bustling scenes of visits and trade over land and ships calling at ports," Xi said in his keynote speech, repeatedly stressing the significance of resurrecting the old trade routes.

LOFTY GOALS Xi first proposed the initiative in 2013, an ambitious plan to connect China to Europe by land (belt) and sea (road). Backing bold words with deep pockets, China established the Silk Road Fund with $40 billion and the Asian Infrastructure Investment Bank, or AIIB, to support the initiative.

The president claimed China has already invested more than $50 billion in Belt and Road countries and created 180,000 jobs over the past four years. He also announced that Beijing will contribute an additional 100 billion yuan ($14.5 billion) to the Silk Road Fund.

Although Xi proposed the initiative, he was not the first to see its potential. That distinction goes to Bo Xilai, the disgraced former Communist Party leader and rival to Xi. In 2011, one year before his downfall and eventual imprisonment, Bo had opened a direct freight train route between Chongqing and Europe.

Presumably because the land route is associated with Bo, observers speculate that Xi is focusing on the sea route, known as the 21st Century Maritime Silk Road. "Considering that Xi built his career in the southern province of Fujian, the true aim of the Belt and Road Initiative is to open the maritime route," says Zhuang Guotu, a chair professor at Huaqiao University.

The maritime route encompasses the South China Sea and the Strait of Malacca, both crucial to China's economy and security. Much of China's imported oil comes through the strait. To secure its sea lanes, Beijing is constructing port facilities in the South China Sea and investing in ports in Myanmar, Bangladesh, Sri Lanka, the Maldives and Pakistan. These ports seem to be part of China's strategy to contain India, which, not surprisingly, failed to send a delegation to the forum.

POWER AND STATUS During the forum, China's state-run media kept reminding all of "home ground diplomacy," a slogan that messages the goal of holding high-profile international events, such as the latest forum as well as the upcoming BRICS summit in Xiamen, Fujian Province this September.

Observers are wondering what this international outreach hopes to achieve. In an article published earlier this year, Foreign Minister Wang Yi cut to the chase: The primary diplomatic mission in 2017 is to make sure this fall's National Congress of the Communist Party goes off without a hitch, with Xi obtaining the power and status he craves.

Xi gets to appoint new leadership at the start of his second term this fall. Having already been elevated to the position of "core leader" -- a status bestowed only upon a select few -- Xi wants more. He intends to use the congress to further tighten his grip on power and secure his legacy by enshrining his own ideology and name in the party's constitution.

The constitution incorporates philosophies of the country's past leaders, but only Maoism and Deng Xiaoping Theory bear the leaders' names. Maoism was established while Mao Zedong was alive, but Deng Xiaoping Theory was included only after Deng died. According to a diplomatic source, if Xi's name is in the constitution, he will have surpassed Deng in status and remain second only to Mao.

Key to this is cementing his position as leader on the global stage, after which he can appoint his faithful associates to ensure his legacy in the constitution.

POLITICAL POSTURING Xi's priority is to carve out its own sphere of influence beyond the reach of the United States. President Donald Trump, formerly antagonistic towards China is now softening his views in the hopes that China will pressure North Korea over its nuclear and missile development.

Additional progress towards smoothing U.S.-Sino relations occurred just three days before the forum. The U.S. and Chinese governments announced concrete steps under their 100-day plan to address trade imbalances, with China agreeing to resume imports of American beef. In return, Washington agreed to send a delegation to the forum, reversing its former position of feigned indifference.

But beyond the grandiose pronouncements and promises, the forum was largely considered political theater, as doubt remains over China's commitment to investing in infrastructure projects in Belt and Road countries.

China's Ministry of Commerce says non-financial direct investment by Chinese companies in 53 of the Belt and Road countries was down 2% in 2016 from a year before. The forum may result in a slight uptick in investment over the short term, but this could change after the party congress.

Meanwhile, diplomatic sources in Beijing have begun to speculate that the ultimate goal of "home ground diplomacy" is to persuade the U.S. to join the AIIB and invite Trump to China before the party congress opens, which would be another score for this particular brand of diplomacy.

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