Summary: Since Chinese President Xi Jinping came into office, he has recognized that the success of his domestic agenda depends on the efficacy of China’s regional diplomacy to create a more welcoming environment.

Since Chinese President Xi Jinping began his leadership transition in November 2012, he has undertaken a more proactive diplomatic approach to reassure the Asia-Pacific region that China’s rise is in fact peaceful. Xi seems to recognize that the success of his domestic agenda depends on the efficacy of China’s regional diplomacy to create a more welcoming peripheral environment. But China’s new leaders have also taken steps that have caused anxiety and uncertainty in the Asia-Pacific, and heightened the risks surrounding regional security flashpoints. This divergent behavior will undermine China’s primary regional diplomatic strategy if continued.

In their first months in office, China’s new leadership team completed tours of Southeast Asia to shore up relations by participating in high-level summitry and expanding trade ties and infrastructure financing. In a two-week period in October 2013, Xi and Premier Li Keqiang visited five Southeast Asian nations, attended the APEC meeting and East Asia summits (without U.S. President Barack Obama), and made encouraging statements about handling territorial disputes in a peaceful manner so as not to obstruct China-ASEAN comprehensive relations or lead to undesired conflict. At the APEC summit, Xi set a goal to more than double China-ASEAN annual trade to US$1 trillion over the next decade, and proposed the formation of an Asian infrastructure development bank. In front of ASEAN leaders, Li reaffirmed China’s pledge to complete negotiations on the Regional Comprehensive Economic Partnership (RCEP) free trade pact by 2015. From October 24-25, the full Politburo Standing Committee attended a work forum on diplomacy in China’s periphery to address policy missteps in Beijing’s more aggressive approach to regional territorial claims in past years, which has caused backlash and hedging behavior among China’s neighbors and impeded economic development.

At the same time as Beijing has embarked on this regional charm offensive, Xi and his leadership team have also demonstrated an assertive and uncompromising policy regarding China’s territorial claims that undermines their regional diplomatic approach. Even before taking office, in mid-2012, Xi took charge of the leading small group on the protection of maritime interests, responsible for Beijing’s strong reaction to the Japanese government’s nationalization of the Diaoyu/Senkaku islands in September of that year.  Ever since, China’s newly consolidated and armed coast guard has fundamentally changed the security environment in China’s near seas by maintaining near-constant patrols around the Diaoyu/Senkaku Islands and consistently venturing into the islands’ territorial waters. Chinese and Japanese ships now operate in close proximity of each other. The possibility of an inadvertent collision between the two nations whose militaries and governments lack necessary communication channels and crisis management mechanisms has greatly increased.

The situation in the East China Sea intensified even further in September 2013 when Beijing flew bombers and a drone over Japan, and on November 23, abruptly declared the establishment of an air defense identification zone (ADIZ) covering an area of the East China Sea that includes the disputed Diaoyu/Senkaku Islands and overlaps with the already-established ADIZs of Japan, South Korea, and Taiwan. The Chinese foreign ministry has not concealed its interest in establishing other zones in the South China Sea and Yellow Sea where contests over territorial sovereignty have experienced a brief but welcome respite from brinksmanship in recent months.  The near-collision of a U.S. Navy vessel and PLA Navy ship in the South China Sea on December 5 was a stark reminder that conflicts over rocks in the Asia-Pacific could trigger a military conflict between the three largest economies in the world.

China’s unwavering stance on issues of territorial sovereignty and its desire to maintain peaceful relations with its neighbors are not necessarily new foreign policy objectives for Beijing.  The difference today is that Chinese leaders are attempting to pursue both goals in a much more forceful manner, with little success. While China’s charm offensive with ASEAN nations has helped to expand economic ties and bolster China’s influence, its sudden announcement of the establishment of its East China Sea ADIZ has triggered a strong regional and international backlash, a renewed demand for greater U.S. security presence in Asia and escalated risk of inadvertent conflict.  The dilemma for China’s leaders will increasingly be how to succeed at reassuring the region of China’s peaceful intentions if, at the same time, they want to aggressively expand China’s territorial claims and demand greater accommodation of its interests.

As Xi enters his second year of leadership, he confronts no shortage of foreign and domestic challenges. By establishing more ADIZs in the South China Sea and continuing a coercive and destabilizing strategy to China’s maritime territorial claims, Xi can expect his diplomatic overtures with neighboring countries, as well as with the U.S., to be seriously undermined. Xi’s all-important domestic economic agenda will also become more difficult to achieve. If, on the other hand, Xi can focus on building mutually beneficial economic and commercial partnerships with neighbors, he can better assure the achievement of his own domestic goals and the region’s broader peace and stability. Given the stakes, all parties should look for ways to encourage the latter approach.

Originally by Paul Haenle, Source: January 7, 2014, AmCham Shanghai’s Insight Magazine