Source: Organized by the author with reference to World Bank Finance. Shareholder Equity
“Top 8 countries voting power”.
https://finances.worldbank.org/Shareholder-Equity/Top-8-countries-voting-power/udm3-vzz9 (September 1, 2020)
ii. Self-binding to ease peer pressures
Although China’s foreign policy position has taken a tough turn since the ascending of Xi Jinping as leader, the rhetoric of “China will never seek hegemony or expansion” has appeared several times in official speeches throughout his term.
Some recent highlights include the following quotes at different occasions.
At the opening of the 19th National Congress of the Communist Party of China in 2017, which is said to be crucial to setting the roadmap of CPC’s ruling under Xi, Xi said that ‘China will never seek hegemony or engage in expansion no matter what stage of development it reaches.’48 In order to ease international concerns on China’s expanding economic influence, Xi said during a speech to mark 40 years of market reforms in 2018, that China would never seek global hegemony nor will it advance its economic interests at the expense of other countries’, and reassured China’s commitment to a multilateral trading system and
48 郭凱 (2017, October 28). China never seeks hegemony, expansion: Xi - China - Chinadaily.com.cn. CHINADAILY.
https://www.chinadaily.com.cn/china/19thcpcnationalcongress/2017-10/18/content_33404757.htm
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open economy.49 Throughout 2019, China published its 10th national defense white paper titled “China's National Defense in the New Era”, mentioning for the first time in a national defense white paper to “never seek hegemony, expansion or spheres of influence”,50 and Xi also explained at the New Economy Forum held in Beijing that the great national rejuvenation, the so-called Chinese dream, is not a dream of hegemony and that international actors shouldn’t be alarmed of the chance of being replaced.51 Most recently in 2020, first the spokesperson of the Chinese Foreign Ministry said that “China will not follow the old path that a powerful country is bound to seek hegemony” in defense of US Defense Secretary’s remark that the CPC “wants to rewrite the rules of the international order”,52 then 2 months later Xi said in the UN General Assembly meeting that China never seeks to decouple from other countries and never seeks hegemony, and that “There is only one system in the world, which is the global system with the UN at its core, and there is only one set of rules, which is the basic norms of international relations based on the UN Charter,” 53 in an effort to signal the world and the organization that while securing its leadership position in various fields, China is hoping to channel its interests through existing systems with current
49 BBC News. (2018, December 18). Xi Jinping says China “will not seek to dominate.”
https://www.bbc.com/news/world-asia-china-46601175;
Yanan. Wang. (2018, December 18). China will “never seek hegemony,” Xi says in reform speech. AP NEWS.
https://apnews.com/article/4c9476378e184f238845337ba442715c
50 L. (2019a, July 24). China will never seek hegemony: white paper - Xinhua | English.news.cn. XINHUANET.
http://www.xinhuanet.com/english/2019-07/24/c_138253236.htm; Liu, X., & Leng, S. (2019, July 24). China will never seek hegemony: defense white paper. Global Times. https://www.globaltimes.cn/content/1158973.shtml
51 Xi Jinping: Chinese Dream not one of hegemony. (2019, November 22). CGTN. https://news.cgtn.com/news/2019-11-22/Xi-meets-foreign-representatives-attending-New-Economy-Forum--LPw9TxJLdm/index.html
52 China says it will not seek hegemony as it becomes stronger. (2020, July 20). CGTN.
https://news.cgtn.com/news/2020-07-20/China-says-it-will-not-seek-hegemony-as-it-becomes-stronger-ShoHdbRpQs/index.html
53 Wendy Wu. (2020, September 24). Chinese President Xi Jinping hits out against hegemony and decoupling at UN.
South China Morning Post. https://www.scmp.com/news/china/diplomacy/article/3102837/xi-jinping-hits-out-against-hegemony-and-decoupling-un
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norms and standards.
This repeated rhetoric indicating to not interrupt the current global institutional dynamic is conforming to what Milner pointed out as hegemonic self-binding, which is when a powerful actor chooses to concede a part of its authority to the mechanisms of the multilateral institutions, signaling the actor’s benign intention and reassuring that it will not take the path of opportunism. As Ashizawa mentioned, this “institutional self-binding” strategy is particularly important to China as it tries to mitigate the fear and pressure coming from suspicious international actors54 for China’s continued economic expansion and assertive security stance over the years. In the 2018 IFF China Report, Pang Zhongying, IFF Academic Committee member, commented on China’s creation of AIIB as creating a new ‘non‑hegemonic model of global economic governance based on dialogue by ‘binding its hands and feet’ to allow others to trust its good intentions’,55 since the advancing of the BRI agenda is not generally fully trusted by international actors. Note that the AIIB standards have referred to the ones of existing MDBs, and it often co-finance projects with WB and ADB. Therefore, strictly speaking, China is trying to assume “leadership” but not “hegemony” in an institution while still playing under current global norms and standards.
iii. Normative appropriation
From a constructivist perspective, multilateralism provides a collective identity that participating countries share, and gives the sense of a proper way to
54 Kuniko Ashizawa. (2014, October 24). Regional Institution-Building in Asia: Are There Any Lessons from Europe?
AICGS. https://www.aicgs.org/publication/regional-institution-building-in-asia-are-there-any-lessons-from-europe/
55 The IFF China Report 2018. (2018, May 2). Central Banking. https://www.centralbanking.com/content-hub/the-iff-china-report-2018-3411986
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engage among participants.56 There are two aspects of China’s normative appropriation in multilateral institutions: socializing China into Western norms and standards and appropriating Chinese preferred norms through multilateral institutions. Both aspects give China the legitimacy of advancing its interest as long as it is carried out through multilateral institutions.
The bilateral nature of the BRI gives China the convenience and advantage to negotiate BRI deals that favor China’s standards and suppliers, all without the need of high transparency as running the deal through an authentic multilateral organization. Also, the goal of fast delivery of infrastructure projects fundamentally differs from projects that go through other MDBs such as World Bank and Asian Development Bank, which requires a lot of risk assessments and mitigation prior to the implementation of the projects. Although the different approach of BRI projects from multilateral development aid has given China the advantage of securing its interest and extending the scope and number of BRI, it has caused suspicion from other actors including loan recipients and countries that channel their aid through MDBs and pushes China to seek multilateral approaches for the BRI to share the risks and gain legitimacy for the projects.
By mentioning this, take the BRI for example, China has since the creation of AIIB been signing MOUs and co-financing agreements with existing MDBs as mentioned in the previous sections, in order to align its interest with existing MDBs. From the perspective of normative appropriation, this is China finding a way to socialize itself into the Western norm and standard, which is already widely accepted as the way of implementing foreign aid projects. Moreover, other
56 Helen V Milner, Dustin H. Tingley, The Choice for Multilateralism: Foreign Aid and American Foreign Policy (2011). APSA 2011 Annual Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1900147
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aforementioned efforts China did to incorporate the BRI into multilateral platforms and connect it to shared values have also meant that China is trying to create a shared identity for the BRI stakeholders, ranging from recipients to international organizations. The shared identity then empowers China to normalize the norm and standard and the influence expansion they promote through the BRI.
4. Chapter summary
With the reasons discussed above, we can now see that advancing foreign policies through multilateral institutions is a valuable strategy for an actor that is seeking a certain level of influence expansion internationally. Looking from the efforts that China made to secure senior positions in several international organizations, including heading four of the 15 UN and UN-affiliated agencies on air travel, telecommunications, agriculture, and industrial development, and assuming senior management positions in international financial institutions including WB and ADB, they have made substantial achievements in channeling international actions that sustains Chinese standards and interests.57 Therefore, this thesis decided that with the BRI being the grand strategy of China’s foreign policy campaign, it is important to discuss in concrete cases how it is being incorporated into the systems of WB and ADB, both believed to be setting the norms and standards of development aid practices. As probably the most suitable arena aside from the AIIB for China to sway resources and organization directions towards the BRI, China has been working with both organizations, and they have been co-financing projects with the AIIB over the years, of which will be observed in the following chapters. As explained in the first chapter, this thesis will be determining the degree of change in MDB’s organizational behavior while laying out the content
57 Yaroslav Trofimov, Drew Hinshaw, Kate O’Keeffe. (2020, September 29). How China Is Taking Over International Organizations, One Vote at a Time. WSJ. https://www.wsj.com/articles/how-china-is-taking-over-international-organizations-one-vote-at-a-time-11601397208; The PRC in International Organizations. (2020, April). USCC.
https://www.uscc.gov/prc-international-orgs
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of its intervening variables: voting behavior, coalition, and norm and standard setting.