A very important meeting which approved China’s new policy for relations with its neighbours seems to have attracted little attention and comment, possibly because it was overshadowed by the anticipation surrounding the Chinese Communist Party (CCP) Central Committee (CC)’s Third Plenum which was held a couple of weeks later in November 2013. All seven members of the CCP CC Politburo Standing Committee (PBSC) attended the entire two days (October 24-25, 2013) of this meeting, along with representatives of the various departments of the Central Committee, State Councillors, the Central Leading Small Group for Foreign Affairs and China’s Ambassadors to important countries. Convened for the first time in the history of the People’s Republic of China (PRC), the meeting approved far-reaching major changes in China’s diplomatic strategy and significantly, also for the first time ever, categorized China’s neighbours as ‘friends’ and ‘enemies’. It decided to forge regional, sub-regional and bilateral ‘cooperative’ security relationships and gave a definite role to the CCP.

Prior to this 2-day meeting in October in Beijing, the Politburo convened at least twice over the space of the past year to deliberate the issue. China’s new strategic policy towards its neighbours, labelled by Chinese analysts as ‘Peripheral Diplomacy’ (zhoubian), heralds a significant shift in the manner in which Beijing will henceforth conduct relations with its neighbours. Elements of the policy focusing on South Asia were being put in place by Chinese leaders, including Xi Jinping and former PBSC member Zhou Yongkang, over the past three years.

It is now clear that Beijing’s categorization of nations as ‘friends’ and ‘enemies’ will guide its conduct of bilateral relations. Key features of the new policy aimed at securing global leadership for China will include emphasis on the “China Dream”, promotion of bilateral security relationships, and the forging of regional, sub-regional, or ‘cooperative’ security ties. The new policy strives to strike a balance between the defence of national sovereignty and the maintenance of regional stability. It simultaneously stresses that efforts will be made for better political and economic relations with neighbouring countries, closer security cooperation and people-to-people contact. 

Official reporting of Xi Jinping’s speech at the 2-day conference was predictably guarded. Still, they noted his emphasis that ‘most of the neighbouring countries have a friendly and mutually beneficial relationship with China’ and, importantly, that the strategic goal of China's diplomacy with neighbouring countries is to serve the cause of ‘national rejuvenation’. This was clarified to mean consolidation of friendly relations with neighbours and making the best use of current strategic opportunities. Emphasising that ‘peripheral diplomacy’ is intended to make neighbouring countries ‘feel safe’, he said China’s interests must be better integrated with theirs. Regional economic cooperation, establishment of a ‘Silk Road economic belt’, ‘a maritime silk road for the 21st century’ and an economic corridor through India, Myanmar, and Bangladesh (BCIM) were listed as among the key objectives. Other features include accelerating the opening up of border areas, deepening reciprocal cooperation between China’s border areas and neighbouring countries, and promoting regional and sub-regional security cooperation. 

Xi Jinping specifically highlighted a role for the CCP in safeguarding peace and stability in the region. This points to the CCP, and particularly the CCP CC’s International Department and United Front Work Department (UFWD), playing a more pro-active role in bilateral relationships including establishing and enhancing party-to-party ties. An example is the UFWD’s growing profile in Nepal and direct involvement in Buddha’s birth-place of Lumbini.  The main objective, Xi Jinping stressed, is to ensure favourable external conditions for China's reform, which includes development and stability, safeguarding national sovereignty, security and development, maintaining world peace and stability and promoting common development. He said ‘common ground and converging interests’ should be emphasized to achieve these objectives. 

Salient elements of the new strategy of ‘Peripheral Diplomacy’ have filtered out through commentaries and clarifications offered by senior CCP cadres. China’s strategic analysts and academics are unanimous that relations with the US are crucial to China.

Reputed Tsinghua University Professor Yan Xuetong, who is Dean of the Institute of Modern International Relations and Chief Editor of ‘The Chinese Journal of International Politics’, recently underscored this while explaining the ‘new type of big power relations’ proposed by China’s President Xi Jinping to Obama while on a ‘working’ visit to the US. Yan Xuetong’s proximity to Xi Jinping adds considerable importance to his observations and analyses. Yan Xuetong said that far from denoting an alliance, this new type of relations is intended to prevent Sino-US relations deteriorating from one of “competition” to “confrontation”. He specifically acknowledged the “complete lack of trust”, but suggested this is “not a prerequisite to a relatively peaceful accommodation”. He candidly stated that “China and the U.S. have not trusted each other since 1989 and are not likely to in the future. But interests will form the cornerstone of this relationship….although China and the U.S. are strategic competitors”. He said the most desired relationship would be termed “cooperative”, like that between China and Russia. The other two categories of relations are “competitive” as with the US and “confrontational” as in the case of Sino-Japan relations.

China’s Ambassador to the US, Cui Tiankai, conveyed the same idea more diplomatically in context of the new policy of ‘Peripheral Diplomacy’ to a US audience on February 20, 2014.  He underlined the need to shift the orientation of Sino-US relations from one of “crisis management to opportunity management” adding that using coercive language is not constructive. He also cautioned against “unilateral interpretations of some international legal instruments, and attempts to impose these interpretations on others”.  Cui Tiankai acknowledged that “the United States is a powerful and very strong country…the most powerful and strongest country in the world, and will remain so for many years to come” and that China’s effort to build the ‘new model of relationship’, is based on full recognition of this fact.

In an article posted in Chinese on Jan 28, 2014, Yan Xuetong said the conference on ‘Peripheral Diplomacy’ signalled China's strategic shift in its foreign policy outlook. He said that unlike the US or West, China will use alternative strategies “to achieve global leadership” and attributed this to the compulsions of nuclear weapons and globalization. Of the two core principles that have guided Chinese foreign policy since the early 1990s, Deng Xiaoping's famous dictum of ‘lie low bide your time’ (taoguang yanghui) has been discarded while the other, of according first priority to relations with the US, has been modified. The new dictum allows that although China and the U.S. are “strategic competitors”, they “have common interests, complementary interests and conflicting interests”. This provides both countries room for active cooperation when interests converge and a degree of preventive cooperation where interests conflict. 

A major change is that while for the past two decades China opted for a neutral stance avoiding confrontation at all costs and never opposing the US, the new policy advocates engaging with neighbouring countries so as to “align their interests with China’s rise”. Xi Jinping’s stress on “friendship and loyalty between China and its neighbours”, he said, “is more significant than it sounds”.  Yan Xuetong clarified that henceforth China’s foreign policy will reflect the different treatment for China’s “friends” and “enemies”. China will find ways to ensure that greater benefits and gains flow from China’s development to those willing to play a constructive role in China's rise. In this manner it hopes to give its neighbours an incentive in China’s development. With some select ‘key’ neighbours China will even try to create “communities of shared common destinies”. In addition to economic interests the latter will “include a wider range of strategic elements” and a strong political dimension. This could extend to building security relationships, including providing security guarantees as in the case of China’s agreement with Ukraine in December 2013.

Referring to the three specific strategic areas of focus identified by China’s leadership, namely, the "new silk road" with Central Asia, a maritime silk road with South East Asia, and the economic corridor through India, Myanmar, and Bangladesh, Yan Xuetong said these regions can expect considerably increased willingness by China to underwrite substantive economic, security, and other benefits in exchange for political support for China's regional objectives.

At the same time, Yan Xuetong emphasized that China’s new policy of ‘peripheral diplomacy’ means that those who are hostile to China, or oppose it, will be confronted with sustained periods of tough sanctions and isolation. He assessed that China's new foreign policy outlook in the region will provide an expanded set of strategic options and ample chances to avoid using “military conquests” to achieve regional dominance.

China’s official news agency ‘Xinhua’ on February 7, 2014 separately clarified the kind of political support for regional objectives that China seeks as part of “peripheral diplomacy”. Describing Russia as a “good example of China's regional diplomacy, the core of which is to treat neighbours as friends and partners and help them to develop”, it regretted that “some countries in the region chose to ignore history and international law inciting territorial disputes with China and disturbing peace and development of the Asia-Pacific region”. Referring to Japanese Prime Minister Shinzo Abe’s visit to the Yasukuni Shrine, the Xinhua despatch accused Japan of continuously “irritating its neighbours and even US allies by attempting to downplay its fascist history and revise a pacifist constitution to make overseas deployment of soldiers possible.” It said Russia and China should both, therefore, commemorate the 70th anniversary of victories in the World Anti-Fascist War and Anti-Japanese War in 2015.

Some features of the new strategy have been clarified by Chen Xulong, Director of the Department for International and Strategic Studies at the China Institute of International Studies (CIIS), a think-tank directly subordinate to China’s Ministry of Foreign Affairs (MFA). Observing that China’s leadership is aware that many of China’s neighbours have reservations about the country’s rise and that in some cases it has even generated friction, he said handling and readjusting relationships with international institutions and neighbouring countries is one of China’s biggest challenges. China’s leaders, he said, are conscious that the US pivot had “disturbed” China’s strategy in Asia and that Japan and the Philippines had “misinterpreted” its message thereby creating a number of immediate and potential challenges in China’s periphery. China can no longer keep a low profile but has to take the initiative and create a favourable periphery. He said the strategy on ‘peripheral diplomacy’ “strikes a balance between the defence of national sovereignty and the maintenance of regional stability”. Efforts will be made for better political and economic relations with neighbouring countries, for closer security cooperation and people-to-people contact. 

Qin (closeness), cheng (earnestness), hui (benefit) and rong (inclusiveness) were identified as the four basic principles of ‘peripheral diplomacy’. Chen Xulong said with them China will be able to realize “virtuous interaction” with the United States, India and other major countries. He clarified that ‘closeness’ refers to developing close relations through frequent visits; ‘earnestness’ means to show enough sincerity in solving neighbourhood problems; ‘benefit’ refers to the principle of mutual benefit, on which cooperation with neighbouring countries will be strengthened to weave a network of common prosperity thus bringing them benefits from China’s development; and ‘inclusiveness’ means that the Asia and Pacific regions are big enough to include all parties for common development. 

Problematic in China’s efforts to implement the strategy of ‘peripheral diplomacy’ will, however, be its insistence on achieving its sovereignty and territorial claims and desire to project power. Reiterating the explicit assertions made on two separate occasions in 2011 by the official ‘Xinhua’ news agency, the CCP’s ‘People’s Daily’ (Renmin Ribao) on Nov 4, 2013 declared that ‘China pursues an open strategy of a win-win situation through beneficial cooperation, but will absolutely not trade the nation's core interests away, and definitely will not brook other countries' wilful hurting of China's legitimate rights and interests’. Severe complicating factors that could be introduced by the beginning of the next decade will be the survival and livelihood issues of acute water and food scarcities. 

A change is discernible in Beijing’s posture from the time in 2010, when during Hu Jintao’s visit to the US it opted to drop its description of the South China Sea as an ‘issue of core national interest’, to the present when it has clarified that it will not back off from its maritime territorial claims. Beijing’s unrelenting insistence on its maritime territorial claims in the South China Sea and East Sea, together with its assertive posture, underscores its ambition for dominance over the entire region. 

This ambition is evident in China’s occupation of the Mischief Reef and Scarborough Shoal and latest bid to gain control over the Second Thomas Shoal, all claimed by the Philippines; repeated encounters with Vietnamese and Philippines vessels; renewed claims over St James’ Shoal claimed by Malaysia and the Ieodo Rock of South Korea; unilateral declaration by Beijing that non-Chinese citizens and vessels must obtain prior permission to enter or fish in a maritime territorial zone that covers virtually half the South China Sea and which directive is being enforced by China’s maritime agencies and Hainan Island authorities who, according to the Hainan Party Secretary, push back fishing vessels each week; refusal to clarify the U-shaped line on maps on which basis Beijing claims sovereignty over territories in these waters; and Djakarta on March 12, 2014, designating as a ‘dispute’ the  doubts raised by the U-shaped line on Chinese maps over Indonesia’s Exclusive Economic Zone.

Beijing’s handling of its disputes with rival claimants has varied, but the end objective of securing control over the territories preferably without conflict, is unchanged. Chinese officials have, for example, warned the Philippines to be prepared for a tough four years for taking the contested claim over the Scarborough Reef to international arbitration while its patrol vessels continue to muscle Philippines Navy ships out of waters claimed by China. With Vietnam, the communist parties of both countries have been active in trying to keep ties friendly. The situation is more complex with Japan, which has been singled out as a major potential threat. In the dispute over the Senkakus, called Diaoyu in Chinese, China is trying to isolate Japan and has adopted a tough military stance with its aircraft, ships and submarines going up to the Senkaku Islands and beyond Okinawa. It has ceased all official contacts, but at the same time allowed tourism and economic ties to remain unimpeded. 

The current tensions in the Asia-Pacific and their effect on Sino-US relations were present in the remarks Cui Tiankai made on US soil on February 20, 2014 when, referring to the interests of both countries in the Asia Pacific, he clarified that Beijing is not about to resile from its maritime territorial claims. He said the “United States' presence, interests, and influential role in the Asia Pacific is fully and widely recognized” and that China welcomes a “constructive role by the United States in the region”.  Equally important was his observation that “China is also a Pacific country, and China is also an Asian country. Geographically, China is just situated in the centre of the Asian continent. And we have been here for centuries, perhaps a little bit longer than the whole history of the United States. So I think it may be fair to say that neither Chinese nor Americans are aliens from Mars in the Asia Pacific, but we are somehow more indigenous than you are”. Warning that “any attempt to manage or manipulate the regional affairs at the expense of China's legitimate interests in the region, cannot be justified, and would indeed be detrimental to the stability and prosperity of the entire region, and eventually will serve nobody's interests”, he implied that the new model of big power relations was intended to address such issues.

Shanghai-based Chinese venture capitalist and commentator, Eric X Li, more bluntly echoed similar thinking at a conference in Seoul around the same time. He argued that there had been no missteps by China in the territorial disputes in the South China Sea and East China Sea and that history will “probably prove” that China had dealt with these situations with unmatched agility. China's strategic objective in the region, he said, is to change the status quo -- the establishment of which it did not have enough power to participate in or influence -- to its advantage while avoiding military conflict. He described China’s most important achievement in the past thirty years as its mastering of the international economic system, established by the US, without being absorbed by it. He concluded by saying that China has, and always will, act in its own best national interests. He emphasized that consistent with the cultural roots of the Middle Kingdom, China’s “world view is to keep out barbarians and not invade them”.

Soon after the policy of ‘Peripheral Diplomacy’ was approved, the China Institute of Contemporary International Relations (CICIR), subordinate to China’s Ministry of State Security (MoSS), convened a round-table the same month. Entitled “Current situation in China’s surrounding areas and its Strategy”, its proceedings were published in CICIR’s Xiandai Guoji Guanxi (Contemporary International Relations). The summary of this round-table prepared by the  European Council on Foreign Relations observed that its focus was on China’s relations with the US, India, Mongolia and Central Asia. It said while participants differed in their views, they were unanimous about the role of the US.

Lin Hongyu of Peking University made the interesting disclosure that the Boeing XB-37, the new US space orbiter, overflew Beijing at the beginning of the crisis over the Air Defence Identification Zone (ADIZ) set up by China in the East China Sea in November 2013. Discussants at the CICIR meeting allanticipated there would be an escalation of global competition among the major powers: China, Russia, India, and the US. Almost all speakers took serious note of the TPP, even though they thought its goals very ambitious, and with the discovery of new energy resources such as shale oil and gas and Japan’s invention of a process that can tap methane from underwater ice blocks, viewed it as signalling a “third Industrial Revolution”.  The Regional Comprehensive Economic Partnership (RCEP) was viewed as China’s counter-strategy and some suggested that China and RCEP should join with the TPP. Lin Limin, Editor-in-Chief of the CICIR journal ‘Xiandai Guoji Guanxi’ (Contemporary International Relations) acknowledged these differences and warned that China’s “aspirations” should not exceed its “capabilities”, because this has in the past spelt disaster for powers such as Russia, Germany, and Japan.

Discussions on India at the CICIR round-table were interesting with general agreement that there has been a “gradual maturing process” (zou xiang chengshu de guocheng) in China-India relations since 1988 as evidenced by the lack of open conflict over the border dispute. Li Li, Associate Professor at CICIR who has studied at a university in India, took a generally benign view of the relationship though she blamed lack of trust and mutual understanding for the failure to arrive at any agreement. She said this had been exacerbated by the ‘malicious’ assertions made by Western researchers and part of the Indian media who were creating a “confrontational point of view” (duikang shijiao) and presenting relations between China and India as antagonistic.  To deal with this, political leaders of the two countries have increased the number of high-level meetings and set up a formal exchange mechanism. Indo-US relations figured prominently in discussions, with a consensus that these would harm China’s security and national interests and had already generated challenges in the maritime arena. It was apprehended that India will obtain technologically advanced long-range weapons from the US to extend its reach deep into China and acquire leverage over China in negotiations. On land, India-US security cooperation was said to be already causing friction on China’s western borders. The need for China to take precautions was stressed. 

India-China relations are a key component of China’s new strategy of ‘Peripheral Diplomacy’, which has obvious implications for India and Japan. The new policy signals that Beijing will intensify efforts for economic engagement with India, including making investments, and accompany this with high-level visits. The visit proposed by Chinese President Xi Jinping for October-November 2014 is a good example as he is likely to be accompanied by more than 150 Chinese Chief Executives (CEOs). Beijing will try to focus on the development of economic ties while setting aside resolution of the contentious border dispute till what it deems a more opportune time. Repeated assertions that China will not barter away its “core national interests” substantiate this. 

During the premeditated intrusions in the Depsang Plains in Ladakh too, China’s media and officials in India and Beijing were insistent that the PLA personnel were well inside Chinese territory. The influential ‘Zhongguo Qingnian Bao’ (China Youth Daily) on May 14, 2013 accused India of triggering tensions by adopting a “forward policy” and stressed that “Ladakh was unified with China's Yuan Dynasty as part of Tibet in the 13th century” and was “under the jurisdiction of the central government of China's Qing Dynasty until 1830s”. Stating that it was important for access to Central Asia, it added that “although it is under Kashmir, Ladakh shares similarities with Tibet in terms of culture, religion, customs, and language, and it has long been dubbed "Little Tibet." The objective will be to maintain India-China relations at a ‘competitive’ level while trying to prevent emergence of uncomfortable warmth in Indo-US relations. 

India will have to contend with the policy’s likely fall-out on its neighbours. Beijing’s initiatives in Myanmar and Nepal reflect its new approach. Qiu Guoheng, China’s former Ambassador to Nepal and presently Director General of External Security in China’s Ministry of Foreign Affairs (MFA) visited Kathmandu in early December 2013. While there he conveyed that as part of ‘peripheral diplomacy’, Beijing had decided to revise upward the quantum of foreign assistance to developing countries in its neighbourhood and that Nepal and Pakistan will particularly be beneficiaries. He said development of the ‘new Silk Road economic belt’ would benefit Nepal. Talks are separately underway for extending the 1200-kilometers Qinghai-Lhasa-Shigatse railway to Kathmandu, agreed to by Chinese Premier Wen Jiabao during his unannounced visit to Nepal in 2012 and which, once completed, will alter the geostrategic balance in the region. The CCP CC’s International Department and UFWD have both stepped up activities in Nepal, where suppressing pro-Dalai Lama Tibetan activists is not China’s sole interest. 

China initiated steps to safeguard its interests in Myanmar in early 2013. It replaced its Ambassador in Yangon and, quite unusually, appointed 74-year old Wang Yingfan, a retired diplomat related to former PBSC member Qiao Shi, as Special Envoy for Asian Affairs. Beijing also, for the first time since the Mao era, interfered in the internal affairs of a country – albeit at its request – and brokered at least three rounds of meetings between the rebel groups in north Myanmar and Myanmar’s army.

Reliable reports from Beijing state that Xi Jinping has taken personal charge of the ‘Silk Road economic belt’ project. This project envisages an outward westward push from Yunnan towards Bhutan, Nepal, Pakistan and Central Asian countries up to and possibly beyond Turkey. India’s north east is part of this as well as the Bangladesh-China-India-Myanmar (BCIM) corridor. The economies of India’s north eastern states are very fragile and connectivity is extremely poor. Acquiescing to both these proposals, which will certainly be accompanied by enormous pressure, by India would be premature. It would mean allowing the free influx of Chinese goods and nationals with the attendant danger of the latter settling down in these areas.

‘Peripheral Diplomacy’ envisages sub-regional, regional and “cooperative” security relationships. China already has an all-encompassing military relationship with Pakistan. The People’s Liberation Army (PLA) has been steadily upgrading ties with the Nepal Army and Beijing recently secured a maritime cooperation agreement with Sri Lanka. A serious precedent is that set by the security agreement signed between China and Ukraine on December 4, 2013. It states that “China promises…to provide security guarantees to Ukraine if Ukraine is attacked by nuclear weapons or threatened by such aggression”. China and Bangladesh signed a civil nuclear cooperation agreement, which has remained inactivated. Enticed by economic largesse these countries could in future be drawn into a sub-regional, regional or “cooperative” security relationship with China. The end objective of China’s ‘peripheral diplomacy’ is to use alternative strategies “to achieve global leadership”.

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(The author is President of the Centre for China Analysis and Strategy (CCAS) and Member of the National Security Advisory Board. He is a former Additional Secretary in the Cabinet Secretariat, Government of India.)