Dealing with the Dragon: The China Dream of Xi Jinping

Thomas S. Axworthy

For the past two decades, China’s rising economic leverage, broadening geopolitical alliances and global infrastructure imperialism have shifted the balance of power between democracies and non-democracies in ways that have only been exacerbated by the American presidency of Donald Trump. As long-time Liberal policy maker and academic Tom Axworthy writes, Prime Minister Justin Trudeau got a taste of Beijing’s post-Trumpian swagger in December.

On January 17, 2017 Chinese Premier Xi Jinping gave the keynote speech at the World Economic Forum in Davos on the theme of “Jointly shouldering the responsibility for our times.” In a polished address sprinkled with Western and Chinese literary allusions, Xi spoke about globalization, using a line of a Chinese poem that “honey melons hang on bitter vines; sweet dates grow on thistles and thorns,” in declaring “no one will emerge as a winner in a trade war.”

Three days later, in his inaugural address, Donald Trump proclaimed that “from this day forward, it’s going to be only America first,” then promptly withdrew the United States from the Trans-Pacific Partnership. A few months later, in June 2017, Trump also withdrew the U.S. from the Paris Climate Accord. With Trump turning his back on the post-war international structure that the U.S. had done so much to construct, future historians may well write that it was in January 2017 that the international community began to look to China for global leadership, rather than the U.S. For the Chinese, Trump is the gift that keeps on giving.

A new era is certainly upon us as the former great power of China re-emerges. The late Lee Kwan Yew, the founding prime minister of Singapore known for his strategic insight, had it right when he said: “The size of China’s displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.”

Canada has been more adroit than many states in realizing the magnitude of this shift in the world order. Pierre Trudeau, in his greatest foreign policy achievement, initiated negotiations with the People’s Republic of China in 1968 that led to the establishment of diplomatic relations in October 1970. This was two years before Richard Nixon’s landmark trip to China. Continuing the family tradition, Justin Trudeau has promoted deepening trade ties with China and in his December visit to Beijing it was anticipated that free trade talks could well begin with the Asian giant. To this day, his father’s recognition of China nearly half a century ago still opens doors for the son in Beijing.

Pierre Trudeau’s 1968 opening to China was risky: China was in the midst of the chaos of Mao’s Cultural Revolution and the Canadian initiative could easily have been rebuffed. But worried about clashes with the Soviet Union, the Communist party leadership was considering a turn to the West. The moment and the initiative met: Canada was ahead of the momentous change that eventually led to Nixon being invited to China.

Justin Trudeau, however, is contemplating a China-Canada Free Trade Agreement at a different moment in Chinese history. China is more powerful than it has been for two centuries and with the spectacular decline in American prestige under Trump, China is enjoying maximum global influence. A free trade pact with China is an intelligent Canadian response to the likelihood that Trump will rip up NAFTA but Trudeau wants more than that: Canada seeks Chinese assurances on labour, gender and the environment, thereby injecting progressive values into the trade agenda.

China will have none of it. Trudeau is still big news in China. I was in the country during Trudeau’s visit and the China Daily News had a picture of President Xi and the Prime Minister on its front page under the headline “Cooperation is Complementary”. President Xi’s message was polite but clear: the two countries, he said, should set aside disagreements arising from their different political systems and cooperate on practical matters like energy. The rabidly nationalist Communist party-run Global Times was less polite harrumphing that China “is also not in a rush to develop its relations with Canada. Let it be”. The expected announcement on formal free trade negotiations between the two countries did not occur. Justin Trudeau is learning what it is like to deal with China’s great power syndrome.

Depending on the specifics, a free trade agreement with China could certainly be in Canada’s national interest, especially with Trump threatening to withdraw from NAFTA. But as Lee Kwan Yew advised, dealing with China is not standard state diplomacy. China is different: it is a 5,000-year-old civilization with a strategic and historical tradition that Chinese leaders continue to apply.

One of its traditions is that Chinese Emperors claimed a “Mandate from Heaven,” whereby the Chinese language, culture and political institutions were the hallmarks of civilization, with China’s neighbours being vassal states. China’s power has waxed and waned over the centuries, but its sense of being “the Middle Kingdom” has always remained constant. That is why China’s clash with the Western powers in the mid-19th century was such a shock. Tellingly, the name given by the Chinese to the treaties signed by the Qing Dynasty with western states and Japan from 1839 to 1901, was the “Unequal Treaties.” The 19th century “Century of Humiliation” and Japan’s invasion of China in 1931, are the twin fires which continue to stoke Chinese nationalism to this day. The ultimate objective of modern day China is to never be humiliated again.

The 2008 Olympics was an international coming-out party for China. The greed of western bankers had created a deep recession in Europe and North America, which China avoided. China’s reluctance to play a leading role internationally began to weaken given China’s success in managing its own economy. Then the times met the man. Xi Jinping is the son of a prominent communist revolutionary and despite his family being subjected to the horrors of the cultural revolution, Xi joined the party at age 20 and rapidly moved up the party ladder, becoming Governor of Fujian Province from 1999-2002 and Governor, then Party Secretary, of Zhejiang Province from 2002-2007. In the mid-1980s Xi spent a week in Iowa as a member of an agricultural delegation. He subsequently sent his daughter to Harvard. He has spoken warmly of his time in the U.S. and returned to Iowa in 2012 to visit the family he lodged with in 1985. In November 2012, he became General Secretary of the 80-million-member Communist Party and it was evident right from the start that Xi was no longer content to hide his capacities or bide his time.

In a visit to the National Museum of China just after becoming General Secretary, Xi announced the phrase that has become the hallmark of his administration: “The China Dream,” he said is “the great rejuvenation of the Chinese Nation.” Xi soon began to fill in the specifics in how he wants to celebrate the 100th anniversary of the Communist party in 2021 and the 100th anniversary of the Peoples’ Republic in 2049. By 2021, per capita Gross National Product is to double. By 2049, he wants China to be a fully-developed modern state. The key to achieving these goals is Xi’s anti-corruption campaign, which is wildly popular with the public. Over 100,000 individuals have been convicted of corruption charges as of 2015.

Chinese leaders prior to Xi had posited similar economic and modernization goals. What is striking about Xi, however, is that a clearly articulated part of his dream includes China being the foremost power in Asia and commanding the respect of other great states in the councils of the world, especially the U.S. He began by creating the Central National Security Commission, chaired by himself, in November 2013. In October 2014, Xi said the goal of this body is “major power diplomacy with Chinese characteristics.” This was the first time in many decades that Chinese leader had described China as a major power. Xi’s international travel schedule has been as expansive as his rhetoric: In his first 30 months, he visited 33 countries on four continents. Xi’s status as the most powerful Chinese leader in decades was confirmed in the October 2017 party congress when his “thought” was enshrined in the constitution, an honour only previously given to Mao Zedong.

Xi wants to return China to the predominance it enjoyed in Asia before the West intruded in the 19th century. He seeks to do this by ensuring control over the territories the Communist Party considers to be greater China, recovering its historic sphere of influence along its borders and in the adjacent seas, so that its neighbours give it the deference that China has traditionally demanded. Power resources to achieve these aims are growing.

Both the World Bank and the International Monetary Fund now identify China’s as the world’s largest economy based on purchasing power parity and it is rapidly catching up to the U.S. based on nominal GDP. By any measure, China’s economic growth in the last generation has been spectacular. Comparing China to the U.S, Harvard professor Graham Allison writes:

“In 1980, China’s economy was smaller than that of the Netherlands. Last year, the increment of growth in China’s GDP was roughly equal to the entire Dutch economy … In 1980, China had 10 per cent of America’s GDP as measured by purchasing power parity; 7 per cent of its GDP at current U.S.-dollar exchange rates; and 6 per cent of its exports. The foreign currency held by China, meanwhile, was just one-sixth the size of America’s reserves. By 2014, those figures were 101 per cent of GDP; 60 per cent at U.S.-dollar exchange rates; and 106 per cent of exports. China’s reserves today are 28 times larger than America’s.”

President Xi has used this vast wealth for some very bold moves in economic diplomacy. In 2013, Xi proposed a new “Silk Road Economic Belt” during a visit to Kazakhstan and since then the initiative has become one of the largest infrastructure projects in the world. The “Project of the Century,” said Xi as he welcomed 26 heads of state for a two-day summit in May 2017. The project involves China underwriting for ports, roads and railways along the old Silk Road linking China with Europe. China is spending $150 billion a year in the 68 countries that have signed up for the scheme. Nothing has been seen like this since the Marshall Plan.

Donald Trump’s withdrawal from the Paris Climate Accord also creates an opportunity that China is happy to fill. In 2014 Xi and President Obama jointly announced an agreement to slash greenhouse gas emissions. This US-China accord, many commentators agree, paved the way for the 2015 Paris agreement; a pact endorsed by nearly 200 governments. Xi told the World Economic Forum that the Paris Accord was “a hard-won achievement … all signatories should stick to it rather than walk away.” This is no empty rhetoric: China has enormous environmental problems, but it is making rapid progress toward its Paris goal of stopping emissions growth by 2030. China now generates a fifth of its electricity from renewable sources, and plans to invest $360 billion in green energy projects. China now owns five of the world’s six largest solar manufacturing firms and the largest wind turbine manufacturer.

China’s wealth has allowed it to invest heavily in the traditional power asset of military capability. China spends about 2 per cent of its GDP ($146 billion in 206), on defence—second only to the U.S., which spent $604 billion. China has active military personnel of 2.3 million, nearly 3,000 aircraft and the fleet of 714 vessels including one aircraft carrier. (The U.S., however, has 19 carriers). A strong military is also an explicit part of Xi’s “China Dream.” Since the U.S. is a global power, by concentrating its forces in Asia, military parity between the United States and China at least in the Western Pacific is drawing closer. A study by the Rand Corporation found that by the end of 2017, China would have approximate parity in four of nine areas on conventional capability critical in a potential conflict in the South China Sea.

China has used its new military capability to make unprecedented maritime claims in the South China Sea. With the exception of China, all the claimants to the South China Sea base their case on the United Nations Convention on the Law of the Sea (UNCLOS). China relies on a mix of historic rights and has produced a “nine-dash line” around the South China Sea. In 2012, China forcibly seized control of the previously unoccupied Scarborough Shoal and has constructed artificial islands in the Spratly archipelago. In 2014, China deployed a deep-sea oil rig in Vietnam’s 200-mile nautical exclusive economic zone, leading to Chinese and Vietnamese ships ramming each other. In 2016, the UN Permanent Court of Arbitration ruled that the Philippines had exclusive sovereignty over the West Philippines Sea and that there was no legal basis for China to claim historic rights to reserves within the sea areas falling within the nine-dash line. China immediately announced that it would not accept the decision of the Tribunal putting it at odds with most of its neighbours.

For 5,000 years, China has been one of the most significant civilizations on our planet. It has re-emerged from the Unequal Treaties of the 19th century and the horrors of invasion and civil war in the 20th century, to take its traditional place as a great power. Napoleon famously said, “Let the China lion sleep.” President Xi referred to this statement when he told a meeting in Paris in 2014. “Today the lion has woken up, but it is peaceful, pleasant and civilized.” For the future of the planet, let’s hope President Xi is right.

Contributing writer Thomas S. Axworthy is a former chair of the Asia Pacific Foundation of Canada, and is chair of public policy at Massey College, University of Toronto. From 1981-84, he served as principal secretary to Prime Minister Pierre Trudeau.