China’s economic diplomacy: Focusing on the Asia-Pacific region

Abstract

Of all the major activities and initiatives by the fifth-generation Chinese leadership, formally inaugurated in 2012, those relating to the Asia-Pacific region are the most noteworthy. The past two years witnessed the Chinese leadership enunciating a “Chinese Dream” vision for the nation and offering to share the prospects of prosperity and stability with the entire Asia-Pacific region and beyond. The leadership also adopted a “new normal” mode, aimed at stabilizing domestic economic growth and improving its quality. By way of establishing and expanding free trade zones, China demonstrates its commitment to liberalization. The spate of free trade agreements concluded with U.S. security allies, in addition to a commitment to expedite conclusion of a bilateral investment treaty with the U.S., points to China’s separation of rules-based trade/investment management from concerns about geostrategic denial. Chinese initiation of the Asian Infrastructure Investment Bank and integration with economies along a “Silk Road Economic Belt” and a “Twenty-first-Century Maritime Silk Road” are bold yet challenging. At the same time, other Chinese economic diplomacy initiatives have yet to win broad-based support. Nevertheless, in its totality, China is not seeking to rewrite established rules of world economic governance.