Achievements point to opportunities and challenges in the next decade

The past 10 years have been a golden period in China's history, one in which the country has achieved remarkable economic growth, become integrated internationally and rapidly expanded its influence. At the 18th National Congress of the Communist Party of China the Party's leadership changed, and new economic targets were set, positioning the country for a new phase of development that will continue to change the world. Before casting an eye over the future, it is worth looking at how China's foreign relations have evolved since the 16th Party Congress 10 years ago.

Stabilizing relations with major powers is one of the country's signal achievements over those 10 years. To do that the government adopted several strategies, Russia and the United States being the best examples. In both cases China set up sophisticated networks of institutions, and the methods of dialogue included meetings between premiers, the Shanghai Cooperation Organization and the Strategic and Economic Dialogue. That institution-building drive has clearly been a resounding success.

Relations with Russia are now stronger, and the chronic turbulence that had blighted the relationship with the US is gone. More importantly, the institution-building reflects Chinese technocrats' preference for adeptly managed foreign affairs and has become a dependable policy tool in managing the country's external relations. Major powers occupy a central place in Chinese diplomacy, and stabilizing relations with them has created a favorable external environment for China and enabled it to focus on economic development.

Another important achievement was China changing its low-key diplomatic posture by becoming proactive. Since 1989 Deng Xiaoping's "keeping a low profile" had been a guiding principle for China's foreign policy. As the country's rapid economic growth astounded the world, more Chinese came to believe that their country's age-old dream of recovering its leading position in the world was within reach. The 2008 financial crisis that swamped the US and Europe stood in sharp contrast with China's fast economic development, and more Chinese questioned the relevance of the low-profile doctrine.

In the 11th Ambassadors and Diplomatic Representatives Conference in July 2009, President Hu Jintao instructed diplomats to "keep a low profile and actively do something". In September 2011 the government published a white paper titled China's Peaceful Development, formalizing "actively do something" into a new diplomatic guideline. According to the white paper, China would "actively live up to its international responsibility" and "assume more international responsibility" as its comprehensive strength increases. The scales of China's foreign policy have clearly tipped to "do something".

As an indicator of its desire to do something, it has poured more money into leading international financial institutions and acquired more voting shares. China has already transformed itself into an agenda setter. In 2008 Justin Yifu Lin, a Chinese national, was appointed chief economist and senior vice-president of the World Bank, and last year Zhu Ming, another Chinese, became deputy managing director of the International Monetary Fund.

Another sign that China is actively doing something is the rapid modernization of its military. China's naval ships are patrolling the Gulf of Aden to combat pirates, and two months ago the nation's first aircraft carrier, Liaoning, was handed over to the People's Liberation Army, and more aircraft carriers may be on their way in the years to come.

The shift in China's diplomatic posture reveals its strategic ambition to turn itself from an underdog that had been bullied by Western powers into a powerhouse that commands worldwide respect and that is on hand to help the world.

Beijing also successfully pursued diplomacy of the economic kind, aiming to secure steady overseas resources and markets. Being the world's factory, China has led the way in industrial output in many sectors, and its need for raw materials is voracious. In 2001 primary products accounted for 16.7 percent of total imports, a figure that rose to 22.4 percent in 2005 and 34.7 percent in 2011.

To secure steady access to overseas resources and markets, in the past 10 years the Chinese mainland has formed 10 free-trade zones or closer economic partnerships with the ASEAN, Chile, Costa Rica, New Zealand, Pakistan, Peru, Singapore, New Zealand and Peru; and Hong Kong, Macao, and Taiwan regions. In 2010 China's trade with these 10 economies was worth $782.6 billion (615.7 billion euros), accounting for more than a quarter of total imports and exports. China is also engaged in free-trade negotiations with Australia, Norway, Switzerland, the Gulf Cooperation Council and the Southern African Customs Union. China, South Korea and Japan are also prepared to set in motion free-trade talks.

What China has achieved in foreign affairs is remarkable and will serve as a policy starting point for the next leadership. As it copes with daunting domestic challenges, including making economic growth sustainable, rooting out corruption and promoting social fairness and justice, it also needs to deal with many external problems.

As Hu said in his keynote speech at the opening of the congress, building a strong national defense and powerful armed forces is commensurate with China's international standing and meets the needs of its security and development, and will be realized through the country's modernization.

The new military and economic prowess create difficulties for the new leaders in striking a balance between the military strategy of active defense and rapid modernization. Of course, modernizing the military has side effects, such as China's neighbors increasingly seeing it as a threat, strategic misperceptions in the US and other major nations, and fueling an arms race in some areas. China insists it has no ulterior motives and is undertaking peaceful development, so the world will watch how it addresses such skepticism, and how it uses its military to fulfill policy aims.

Second, as China rises militarily and economically, it is impossible for it to revert wholesale to its traditional low profile. As it selectively adopts that posture on some sensitive issues, it will be more active in pursuing its own national interests in three fields: first, it will promote reform in the international system, which is riddled with faults and weaknesses, in an effort to ensure it reflects new realities in the power structure rebuilt by the rise of emerging markets; second, since trade is vital to China's economic development, it will strive to promote free-trade practices and oppose any protectionism; third, China will actively engage in regional affairs and pursue a leading role in settling some hot issues.

As China looks after its interests, it will pay more attention to sell its wares. On the other hand, it does not want to be regarded as a purely mercantilist state. As Hu said at the congress, "China will insist on melding the interests of China's people and those of other countries' people."

Third, although the Chinese government emphasizes the need to shift its economic development from export-driven to consumption-driven, the country will continue to serve as a trade engine of the world. It will continue to advance economic diplomacy aimed at securing stable and safe access to raw materials overseas. With China's enlarged domestic market and increased buying power, it will gain leeway to address outstanding trade disputes with other countries, enabling it to be a pioneer in promoting free trade.

The author is an associate professor, School of International Studies, and deputy director, Center For China's International Strategic Studies, Renmin University of China. The views do not necessarily reflect those of China Daily.

(China Daily 11/16/2012 page10)