International Crisis Group : The Foreign Policy Implications of China’s Twentieth Party Congress

 International Crisis Group 

Q&A / ASIA 21 OCTOBER 2022

The Foreign Policy Implications of China’s Twentieth Party Congress

China’s ruling Communist Party is holding its twentieth Party Congress, where it has outlined its development strategy and will announce its leadership for the next five years. In this Q&A, Crisis Group experts Amanda Hsiao and Ivy Kwek read the signals from the early proceedings.

CHINA

What is happening?

The Communist Party of China (CPC) is nearly through its twentieth Party Congress, a key event held twice per decade that signals the direction of Beijing’s domestic and foreign policies. The Congress opened on 16 October with a two-hour speech by President Xi Jinping and will run through 22 October. So far, Xi’s speech and the draft Party Congress report – the most important document that will emerge from the event – suggest a more pessimistic assessment of China’s external environment and a heightened perception of threats to its national security. But they also reflect considerable continuity in statements of national objectives and timelines for reaching them. In particular, Xi’s remarks reiterated Beijing’s longstanding policy on Taiwan, stressing the need for peaceful unification but not taking military compulsion off the table.

Why is the twentieth Party Congress important?

The twentieth Party Congress is one of the most important events to watch in Chinese politics and governance. Some 2,300 delegates have gathered to elect the party’s central leadership, including the Politburo Standing Committee (the pinnacle of internal power) and the general secretary. As China is a one-party state, these figures make up the national leadership as well.

Over the next few days, President Xi is expected to be confirmed for a third term as party boss, in a break from previous norms. The party abolished the constitution’s presidential term limit in 2018. Other major personnel changes are also anticipated, including the replacement of Li Keqiang as premier – generally considered to be the second most powerful position after the president. Who is elected to the Politburo Standing Committee will also be key to the way China is run for the next five years. Its composition – whether it will be made up of Xi loyalists or figures from other influential factions – will serve as an indicator of the extent of Xi’s power consolidation. Replacements are also expected for the top foreign policy posts.

The theme of the 2022 congress is “hold high the great banner of socialism with Chinese characteristics and strive in unity to build a modern socialist country in all respects”. The draft report (which precedent suggests the final version will closely follow) is full of such language. The central task it sets out for the nation is to build China into “a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts” by 2049. Party rhetoric on the definition of what rejuvenation looks like remains vague, holding that China should be strong and prosperous by mid-century, but a likely metric for success is for it to be on par with the U.S. in terms of military and economic strength and global influence. Consistent with the goal set at the Nineteenth Party Congress, the report states that China ought to be a “great modern socialist country that leads the world in terms of composite national strength and international influence by the middle of the century”.

As usual, the draft report’s content is heavy on vision and light on policy, placing greater emphasis on domestic than foreign issues. Nevertheless, it remains an authoritative statement of how the party leadership assesses its external environment and understands China’s relationship with the world.

What view of the international environment and China’s place in it does the draft Party Congress report signal?

Beijing’s assessment of its external environment is somewhat glum compared with its reading five years ago at the Nineteenth Party Congress. Accompanying its darker prognostications are more subdued characterisations of China’s standing in the world, which remain confident but less triumphal than in the past.

The draft report signals China’s gloomier outlook by describing “intricate” and “grave” international developments, involving “global changes of a magnitude not seen in a century” that present “a series of immense risks and challenges” for China. As discussed below, this wording refers in large part to the manifestations of U.S. strategic competition, as well as what Beijing sees as Washington’s efforts to prevent its rise. The language mirrors that used in recent years, including in the “third historical resolution”, an important party document issued in November 2021 that lays out a narrative of the party’s major achievements and experiences over the past century. By contrast, five years ago, the leadership perceived “profound and complex changes” on the international scene, but also stressed that “prospects are bright” for China. The current assessment is not wholly negative: the party continues to see strategic opportunities as well as risks. But it places greater emphasis on “potential dangers” and “worst-case scenarios,” calling on the country to “be ready to withstand high winds, choppy waters and even dangerous storms”.

China’s heightened sense of threat is ... evident in the draft report.

China’s heightened sense of threat is also evident in the draft report’s assessment that “external attempts to suppress and contain China may escalate at any time” and its seven references to foreign or external “interference” in China’s affairs. The latter phrase pops up four times in discussions of Taiwan, once in reference to foreign sanctions, once with regard to Hong Kong and once in the section treating China’s foreign policy. It did not appear at all in the Nineteenth Party Congress report.

The draft report also steers clear of triumphal language found in the Nineteenth Party Congress report, which boldly declared that “the Chinese nation, with an entirely new posture, now stands tall and firm in the East”. Instead, the new text underscores that China has made “new and greater” contributions to humanity, providing “Chinese insight, better Chinese input and greater Chinese strength” to meeting shared global challenges. But it stops short of the claim made five years ago that China was “blazing a new trail for other developing countries to achieve modernisation” and providing a “new option” – or an alternative development path – distinct from the West’s. The new reticence on this point may be an attempt to avoid feeding the West’s competition narrative and a reflection of the leadership’s bleaker outlook.

What are the origins of this bleaker outlook?

The Twentieth Party Congress comes at a critical juncture for China, with Beijing facing growing challenges at home and abroad. Not only has the country endured two years of pandemic response under its highly interventionist “COVID-zero” policy, involving recurrent lockdowns in major cities, but it also faces systemic economic problems including property market troubles. In 2022, China’s GDP growth is expected to slow to 2.8 per cent, after Beijing had set a target of 5.5 per cent in March.

Another key challenge comes from intensifying strategic competition with the United States. In strong language that was not used five years ago but reflects the sharp uptick in apprehension toward Washington, the draft report implies that U.S. policies are “external attempts to blackmail, contain, blockade and exert maximum pressure on China”. For some time, Beijing has perceived a “significant shift … in the international balance of power” – namely that the era of U.S. unipolarity is ending and China’s national strength is growing. It also sees global power becoming more evenly distributed between developing and developed countries. In Beijing’s view, the decline of U.S. power naturally creates opportunities for China’s own rise, but risks loom large for Beijing during this rebalancing period because it is not yet strong enough to assume a position as Washington’s peer. The risks have loomed even larger in the last five years because of the acceleration of Washington’s efforts to – in Beijing’s view – prevent China’s rise.

There is certainly evidence for this view. Under the Trump administration, the U.S. labelled China a strategic competitor. Under the Biden administration, the U.S. has built multilateral support for initiatives aimed at curbing China’s expanding geopolitical and economic influence and its increasing assertiveness in its neighbourhood. The Quadrilateral Security Dialogue, a grouping that brings together India, Japan, Australia and the U.S., implicitly around their respective China-related concerns, has picked up momentum, meeting four times at the leadership level in the last two years. In 2021, the U.S., the UK and Australia signed the AUKUS security pact, which aims to provide nuclear-powered submarine technology to Australia so that it may project power farther from its shores (and closer to China’s). In the economic sphere, the Biden administration began negotiations with thirteen countries on a new Indo-Pacific Economic Framework aimed at “expanding U.S. economic leadership” – and therefore curbing Chinese influence – in the region.

The Biden administration has taken extraordinary unilateral measures to accelerate its technological competition with Beijing.

Bilaterally, Washington has kept tariffs on Chinese goods in place, deepened its cooperation with Taiwan, been more vocal in criticising China’s human rights record and cast its competition with Beijing as part of an ideological struggle between democracy and autocracy. Most recently, the Biden administration has taken extraordinary unilateral measures to accelerate its technological competition with Beijing, tightening export controls on the sale of high-end microchips and chip-making equipment to China. These measures could substantially impair China’s domestic chip industry – at least until it is able to produce these components on its own or secure them through channels untouched by U.S. controls – which could reduce its economic competitiveness and military advancements in the long run.

There is also growing support in the region and beyond for Washington’s efforts to out-compete Beijing, though this trend cannot be chalked up entirely to U.S. suasion. It is also a reflection of growing concerns among some of China’s neighbours and Western countries about what they perceive as Chinese muscle-flexing in the military and economic spheres. Concerns focus on China’s assertiveness along its border with India, around Taiwan, and in the East and South China Sea, as well as its use of economic leverage to achieve political objectives. Increasingly keen to safeguard their economic security, governments in the region have expressed the desire to minimise their economic vulnerabilities vis-à-vis China. Concern about China’s military build-up is also visible in Japan’s intent to double its defence budget and develop longer-range missile capabilities, as well as in India’s decision to shift military assets from its border with Pakistan to the China frontier.

Finally, Beijing’s comparatively gloomy outlook reflects the impact of certain global shocks. Russia’s war in Ukraine is one of them. Beijing’s decision to align itself politically and morally with Moscow on the war has further implicated China as a security and economic threat in the eyes of Western and some Asian democracies. The protracted nature of the conflict and the uncertainties it brings for China’s diplomacy, economy and security (such as the country’s efforts to strengthen food security) add to Beijing’s headaches.

The COVID-19 pandemic is another such shock. Because China’s rapid development was fueled by globalisation and free trade, it views growing support for trade and investment barriers in Western countries as concerning for its own growth. From Beijing’s point of view, the COVID-19 pandemic accelerated anti-globalisation and protectionist trends on top of the damage it did to the global economy.

How does the draft Party Congress report characterise China’s foreign policy and national security goals?

Despite “drastic changes” in the international landscape, the draft report shows considerable consistency with prior statements of how China views its foreign policy and national security objectives and principles.

First, on foreign policy, the draft report suggests that Beijing’s objective for the next five years is “increasing China’s international standing and influence and enabling China to play a greater role in global governance”. China continues to insist that it pursues a distinctive foreign policy aimed at achieving world peace and common development, under the oft-repeated rubric of “human community with a shared future”. It further claims that its approach is inclusive, cooperative, aimed at promoting “equality of all countries”, and respectful of the “development paths and social systems independently chosen by all the world’s peoples”. As in the past, China portrays its approach as upholding “true multilateralism” and promoting a fairer global governance structure centred around the UN.

Beijing is attempting to distinguish itself from, and to delegitimise, what it sees as Washington’s approach to international affairs.

By highlighting these ideas, Beijing is attempting to distinguish itself from, and to delegitimise, what it sees as Washington’s approach to international affairs, which it calls unilateral, hegemonic and exclusive, characterised by power politics, protectionism, interference in other countries’ internal affairs and a Cold War mentality. In contrasting itself to the U.S. in this way, China hopes to project a more positive image for itself to increase its global influence. Under Xi Jinping, China has prioritised strengthening its “discourse power”, or its ability to promote its views globally to challenge what it sees as Western dominance in international public opinion. The draft report reflects this aspiration, stressing the need to “better tell China’s stories, make China’s voice heard and present a China that is credible, appealing and respectable”, so that Chinese global discourse power “is commensurate with our composite national strength and international status”.

Secondly, regarding national defence, the draft report stresses that China’s posture is defensive, and hews largely to military priorities and timelines that have been previously established. Employing language similar to that used at the Nineteenth Party Congress, it notes that, “No matter what stage of development it reaches, China will never seek hegemony or engage in expansionism”. As concerns priorities and timelines, it makes clear that China continues to aim for the People’s Liberation Army (PLA) to meet its modernisation benchmark goals in 2027 and 2035 as waypoints for its long-term objective of becoming a “world-class” military by 2049 – a phrase that suggests achieving parity with the U.S. (Among other benchmarks, by 2027, China hopes to accelerate the integration of artificial intelligence and other advanced technologies into existing capabilities.)

Unlike at the Nineteenth Party Congress, the report does not explicitly reference the deadline of 2049 for making the PLA into a “world-class” military, saying instead that China should “more quickly” advance toward this goal. This omission, however, does not necessarily imply a change in timeline, given the draft report’s focus on 2027 objectives, and the memorialisation of the overarching mid-century goal elsewhere, such as in the third historical resolution.

The draft report also calls for establishing a “strong system of strategic deterrence” in what may partly be a reference to China’s push to expand its nuclear arsenal, which the U.S. government assesses will reach up to 700 warheads by 2027 and at least 1,000 by 2030. At the same time, however, the PLA’s conceptualisation of “strategic deterrence” is broad; it applies to space and cyberspace and includes ways in which artificial intelligence and information technology can be employed for deterrence.

In keeping with tradition, the draft report is light on specific foreign policy initiatives, Notably, China’s flagship Belt and Road Initiative (BRI), which has since its launch in 2013 financed $1 trillion worth of infrastructure projects around the world, does not appear in the foreign policy section as it did previously, but only in the sections related to China’s economic development and achievements in the last five years. Beijing may have lowered its expectations for the program; as China faces increasing difficulty in getting recipient countries to pay off their debts, it has become more cautious about overseas lending. Recent reporting suggests that internal discussions of a scaled-back version of BRI are taking place, one that would focus on reducing risks and recouping losses.

Finally, the draft report refers to China’s Global Development Initiative (GDI) and Global Security Initiative (GSI), two new schemes announced by Beijing in September 2021 and April 2022, respectively. At the moment, official pronouncements on both GSI and GDI are heavy on rhetoric but scant in detail – including about what they will do in practice and how much money Beijing will commit to spending on them. That said, the rough contours of the two initiatives have started to emerge.

The GDI offers Chinese support to help developing countries achieve the UN 2030 Sustainable Development Goals and, so far, includes poverty alleviation, food security and clean energy-related projects.

As for the GSI, it can be understood as an attempt to present a Chinese security concept that is more inclusive than – and a purported improvement on – Washington’s alliance-based approach. According to Beijing, GSI will do this by emphasising “common, comprehensive, cooperative and sustainable security” in which attention is paid to “the reasonable security concerns of all countries”. Since its announcement, the Chinese bureaucracy has been busy pushing the concept across a wide range of its diplomatic engagements, including at the Shanghai Cooperation Organisation and with the Association of Southeast Asian Nations. It is possible that the initiative will result in increased Chinese outreach and assistance to other countries in the areas of counter-terrorism and law enforcement, as inspired by its own domestic national security practices.

Prior to the announcement of GSI, China’s external engagement in these areas already included police and counter-terrorism training programs, and the export of Chinese surveillance technologies, suggesting they are likely to be part of the new initiative. Chinese officialdom describes GSI as an application of Xi Jinping Thought on Diplomacy, meaning that its implementation will likely be accorded top priority.

What does the Twentieth Party Congress report suggest about China’s policy toward Taiwan?

The draft report, and Xi’s speech summarising it, exhibit Beijing’s continued resolve to reunify with Taiwan, while at the same time showing no immediate urgency to do so, despite the recent escalation of tensions in the Taiwan Strait. Much of the language in the draft report repeats what Beijing already articulated in a white paper on Taiwan issued two months ago. The white paper’s publication was probably at first slated to be closer to the Party Congress, but was moved up as a show of resolve in response to U.S. Speaker of the House of Representatives Nancy Pelosi’s visit to Taipei on 2 August. At the top of his speech, Xi – no doubt referring to that episode – claimed that China had “resolutely fought against separatism and countered interference” in Taiwan, “demonstrating our resolve and ability to safeguard China’s sovereignty and territorial integrity”. This line garnered much applause from the audience.

The strategic importance China attaches to unification with Taiwan remains evident.

The strategic importance China attaches to unification with Taiwan remains evident. The report proclaims that “resolving the Taiwan question and realising China’s complete reunification is, for the Party, a historic mission and an unshakable commitment”. It also continues to characterise unification as a necessary condition of China’s rise, calling it “a natural requirement for realising the rejuvenation of the Chinese nation”. Almost identical statements were made in Xi’s speech at the CPC’s centennial celebration in July 2021, the third historical resolution and the above-referenced recent white paper. Previous leaders have also made the link between Chinese rejuvenation and unification.

Key ideas underlying China’s approach to Taiwan also remain consistent, including the “one China principle” (holding that there is only one China and Taiwan is part of it), and continued preference for peaceful unification and a political solution based on “one country, two systems”. This concept, applied in Hong Kong and Macau, has in practice left the two regions with little political autonomy. As for Taiwan, Beijing has offered scant assurance that its fate will be different, promising only to respect its social system and way of life. Given the draft report’s laudatory language that describes “one country, two systems” as a “great innovation of socialism with Chinese characteristics”, it seems unlikely the concept will disappear anytime soon, implausible as it may be that the idea will gain the Taiwanese population’s assent.

As to whether Beijing will seek to take Taiwan by force, the draft text says China will “strive for peaceful reunification with the greatest sincerity and the utmost effort, but we will never promise to renounce the use of force”. (Beijing has long taken this position, though it made no reference to the use of force at the Nineteenth Party Congress.) The report further clarifies that holding out the option of force is “directed solely at interference by outside forces and the few separatists seeking ‘Taiwan independence’” and is “by no means targeted at our Taiwan compatriots”. In a pointed message for the U.S., as well as other Western governments that have increased their engagement with Taipei, the draft report asserts that “solving the Taiwan issue is the Chinese people’s own business, and it is up to the Chinese to decide”.

In underlining that foreign interference and Taiwanese separatists are the source of worsening cross-strait ties, Beijing may hope to more effectively drive a wedge between those “patriots” in Taiwan who support unification and those who seek independence. By emphasising that it maintains the option to use military force specifically to deter foreign and independence-seeking forces, Beijing may be trying to limit backlash among Taiwanese who have reacted negatively to its shows of military force in Taiwan’s air defence identification zone and in the middle of the Taiwan Strait. So far, its tactics have not deterred Taipei from continuing to engage with friendly Western governments or scared the Taiwanese public into submission as intended. Instead, they are spurring support for more defence build-up and further souring opinions of Beijing in Taiwan. In an August poll, 51 per cent of Taiwanese respondents said strengthening national defence capability is a top priority while 68.3 per cent of those polled in October think unfavourably of the CPC, an increase from 47 per cent in June 2021.

As part of this wedge approach, the report also took care to draw a distinction between the Taiwanese people and authorities in Taipei, and to suggest the existence of a deep bond between Taiwan and the mainland. The report makes the usual reference to familial ties across the strait, saying “blood runs thicker than water”. As in the white paper, it seeks to assure Taiwanese of the benefits they supposedly will gain under reunification, including broader economic prospects and integrated development.

The report closes the section on Taiwan with the confident declaration that “the wheels of history are rolling on toward China’s reunification and the rejuvenation of the Chinese nation. Complete reunification of our country must be realised, and it can, without doubt, be realised!” This confidence suggests that while a more assertive China sees the Taiwan question as core to its interests and directly linked to its rejuvenation by 2049, Beijing continues to exhibit “strategic patience”. It believes that time is on China’s side with regard to resolving the Taiwan question.

What does the draft report tell us about how China will address the obstacles that stand between it and its aspirations?

As laid out in the report, Beijing will press ahead with its goal of achieving national rejuvenation, including developing a world-class military on par with the U.S and building Chinese influence abroad, amid a more hostile external environment and deepening economic problems at home. There is continuity in the loftiness of its aspirations, but more and more obstacles stand in its way. The draft text offers clues about how China might manage the dilemmas it faces, but the specific policies it will pursue remain to be seen.

Language that obliquely refers to the U.S. suggests that Beijing’s posture toward Washington will remain defiant even while it seeks ways to mitigate U.S.-led pressures. In response to heightened competition with Washington, the report says China has “put our national interests first, focused on internal political concerns and maintained firm strategic resolve. We have shown a fighting spirit and a firm determination to never yield to coercive power”. At another point, the text asserts: “We have never wavered in our opposition to unilateralism, protectionism and bullying of any kind”. As to what such phrases might mean in practice, a recent speech by Foreign Minister Wang Yi in September 2022 suggests that China will double down on the position that improvement of bilateral relations is conditioned on Washington correcting its behaviour and attitude, rather than any changes on Beijing’s part.

Given heightened attention to Taiwan ... Beijing will likely increase its pressure on Taipei.

Given heightened attention to Taiwan, and domestic clamour for the leadership to show resolve on the issue, Beijing will likely increase its pressure on Taipei. It could ramp up its military and paramilitary presence close to Taiwan, exert greater economic coercion and broaden its use of legal measures such as prosecution on pro-independence charges of Taiwanese living in China. But the draft report implies that Chinese leaders are unlikely to engage in a large-scale amphibious military assault on Taiwan in the near term, given the attendant risks. It suggests that Beijing sees continued patience on the issue as giving China the opportunity to create better conditions for unification, including by building its economic resilience, consolidating its military strength and enlarging its diplomatic sphere of influence.

Faced with a more challenging strategic environment and competition from Western governments, China is likely to continue focusing on strengthening itself domestically, even if it lowers its near-term sights for what it can accomplish externally. Omission of the phrase “creating a favourable external environment for China’s development” in the report, even though it was the subject of an article penned by China’s top foreign policy hand Yang Jiechi in 2020, may point to more modest expectations for the degree to which China can shape its strategic environment.

Contributors

Amanda  Hsiao

Ivy Kwek