DPG China Monitor

Vol. III, Issue 4

Date: May 10, 2020
China faced an increasingly challenging international environment and a rising tide of anti-China public sentiment this month, as global leaders including US President Donald Trump, French President Emmanuel Macron, German Chancellor Angela Merkel, Australian Prime Minister Scott Morrison and British Foreign Secretary Dominic Raab publicly criticised its “mismanagement” of the COVID-19 crisis in the crucial early days of the outbreak. This also resulted in a series of law suits being filed against China seeking damages for deaths, injuries and economic losses caused by the pandemic.

China’s state media warned “if divisions between China and the West are allowed to widen any further, the existing international system can hardly be sustained. Two parallel systems may emerge, with China and Western countries developing their own, as systematic confrontations evolve into a new cold war, or even a hot war”.
Meanwhile, China’s prevention and control activities against imported cases of infection led to reports of strained diplomatic ties with traditional friends and allies like Russia and Africa. China, however, called this “a misleading hype” by the Western media.
To counter the “public opinion offensive” by the West, China went all out to guide international public opinion and convince the world to give the  “problem solver” China more understanding, goodwill and trust. China’s rebuttals often made headlines due to their abrasive nature and intimidating/combative tone, globally referred to as China’s “Wolf Warrior Diplomacy”. China clearly believes this is the need of the hour, given its enhanced global status and the inordinate criticism that it has had to face.
On the other hand, growing frustration with the “West” has seemingly led China to pin its hopes on the “East”. With the trend of counter-globalisation gaining currency worldwide, China has started thinking regional, particularly focusing on the East Asia region (Northeast Asia plus Southeast Asia). The Chinese media touted the special meeting between leaders of ASEAN Plus Three (China, Japan, and South Korea) on April 14, 2020 as a more successful multilateral meeting than this year’s G7 and G20 virtual meetings, as it not only affirmed willingness for regional cooperation but also chalked out a collective action plan to respond to the epidemic and pursue economic recovery.
However, China’s enthusiasm about the “East” proved rather short-lived. The news of Japan setting aside $2.2 billion to help its manufacturers move production out of China led to the panic button being pressed over a potential “de-Sinicisation” trend in global trade and a possible “exodus of foreign capital from China”. Although the Chinese media asserted that China’s status as the "world’s factory" is unshakable, there were voices warning that China should not remain complacent over its competitive edge in manufacturing and start preparing for the worst. A three-fold strategy was prescribed for this: guard against any strategic synergy between Europe, America and Japan to shape the global industrial chain; hedge against the strategy of the United States and other countries to re-capture the mid-end and high-end manufacturing business while keeping China contained to low-end labour-intensive industries; and utilise the window period when the rest of the world is still under the spell of the epidemic  to promote Chinese enterprises so that they can quickly seize the domestic market share vacated by US, Japanese and European enterprises with alternative and upgraded products.
Meanwhile, a series of developments in the South China Sea, like the sinking of a Vietnamese fishing vessel allegedly by China Coast Guard (CCG) near the Xisha (Paracel) islands, announcement by China of two new districts to administer waters in the South China Sea, standardising the names for 25 islands and reefs as well as 55 undersea geographic entities, and Chinese warships, including the aircraft carrier Liaoning, conducting drills and exercises in the disputed waters, further exposed the fragile nature of China’s “East Asian Cooperation Model”.
In the realm of domestic affairs, the highlight of the month was the unblocking of Wuhan, the epicentre for COVID-19 pandemic, after 76 days of lockdown. China also announced that it will convene its most important political event for the year - the plenary session of the National People's Congress (NPC) and the annual session of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) - also known as the “Two sessions", on May 21 and May 22 after a delay of almost two months.  After last month’s emphasis on the opening up of transportation and resumption of businesses, China is now working on plans to restart schools and educational institutions. “Normalising Social and Economic life” has become the new mantra in China, which it believes will deliver the political capital required to deal with the adverse international situation.
India and China celebrated the 70th anniversary of the establishment of bilateral diplomatic ties this month.  However, the mood in either country remained far from celebratory, due to the emergence of new sources of tension in bilateral ties against the backdrop of the epidemic, particularly discord over “faulty” testing kits from China, India’s new FDI norms for neighbouring states with which it shares borders, and the prospect of the relocation of some foreign investment from China to India.