A Year of Turmoil and Changes — International Situation and China’s Foreign Relations in 2020
The world witnessed three major developments in 2020, namely the evolution of global changes unseen in a century, the completion of China’s first centenary goal, and the unexpected global outbreak of COVID-19. Shock waves were felt in economics, politics, the society, the technological sector and people-to-people exchanges, highlighting the fact that we all share weal and woe together.
A Bumpy Road to Economic Recovery Amidst An Unprecedented Pandemic
The COVID-19 outbreak caught the world by surprise in early 2020, and soon spread to over 210 countries and territories, taking its toll on nearly 7 billion people. It has become the worst global health crisis since World War II. Challenges brought by the pandemic have undermined human health, economic development, social stability, national security, and international relations.
The lockdown induced by COVID-19 has disrupted the global supply chain, industrial chain, and value chain, and hit the global stock market and crude oil market hard. Turbulence in the capital market and considerable economic contraction have reversed the upbeat economic forecast at the beginning of the year. Hundreds of millions of people may fall into extreme poverty.
Western economies represented by the US and Europe have suffered a heavy blow. The US saw its economic growth plummeting in the first two quarters of 2020. Its stock circuit breaker was triggered 4 times in March. According to the forecast by the European Central Bank, European GDP would contract by 8%, with the inflation rate at 0.3%. Europe suffered an economic plunge in Q1 and Q2. Despite a robust rebound in Q3, economic growth remained far below the pre-epidemic level. The growth momentum for the service sector has been weak. Downward pressure still lingers on.
Here in Asia, China, Japan, the ROK, the DPRK and Vietnam have kept the virus in check, thus cushioning the pandemic’s impact on economic and social progress. According to the IMF’s World Economic Outlook released in October 2020, recovery in China has been faster than expected and will be the only major economy with positive growth. In comparison, Indonesia, Malaysia, the Philippines and Myanmar face a tougher situation, with their response measures and capacity for social macrocontrol under intense pressure. India has seen the pandemic going out of control in some parts of the country, resulting in huge economic and social costs. With disruption in the supply, industrial and value chains, the US and Japan attempt to apply administrative means to move some businesses from China to South Asia and Southeast Asia, but their attempts cannot change the intrinsic laws of economics.
In terms of short-term macro-economic policies, central banks in major Western countries have resorted to massive QE which may come with many side effects, including a new round of asset price bubbles, indebtedness and inflation. From the long-term perspective, the risk of low demand, low inflation, low growth, high debt, high unemployment, and high risk of bubbles will persist. Stimulus measures adopted by developed countries may lead to imported inflation, currency devaluation and asset market risk in emerging economies.
The pandemic has also put economic globalization and multilateral governance under strain. People-to-people exchanges have come to a halt. Some countries have rushed to economic reopening before it is safe to do so, allowing the epidemic to go out of control. Some western countries have even gone so far as to seize medical supplies of their allies. The rise of unilateralism and protectionism have posed a daunting challenge to the international order underpinned by international law. The WHO appellate body has fallen into paralysis. Certain countries have deliberately pushed for decoupling through long-arm jurisdiction. As countries turn inward in pursing development, transnational enterprises have also adjusted their global strategy to reduce dependency on the global supply chain.
Tense Major Country Competition and Accelerated Polarization and Adjustment
The year 2020 saw intensified strategic competition between major countries and accelerated changes in the international landscape. With an increased sense of crisis, the US wished to maintain its hegemony through arms race in space and breakthroughs in quantum technology. Its military budget for 2020 was $738 billion, ranking first in the world. The debut of its Space Force flag at the White House in early 2020 has stirred up the nerve of major countries for an arms race. In addition, the US has adjusted its global military strategy. First, its military presence in Europe has been reduced. Second, 2,500 military personnel have been pulled out of Iraq and Afghanistan. Third, more troops have been sent to Asia. F-35 fighter aircrafts have been deployed in the military base in Japan. It was announced in November to create the 1st Fleet to step up military deployment in the region. However, it remains challenging to pursue America First championed by Trump and the US hegemony against the backdrop of declining economic strength.
The fissure between the US and Europe has grown wider. Upholding unilateralism and American First, the Trump administration has taken arbitrary actions to withdraw from international organizations and treaties like the Paris Agreement and Intermediate-Range Nuclear Forces (INF)Treaty. At the same time, the US has contained the EU’s efforts to seek self-dependence on military strategies. It has pressured Europe on trans-Atlantic security to force greater responsibility on the latter. On COVID-19 response, the US has been acting against reason and pursued a beggar-thy-neighbor approach irrespective of Europe. Unilateralism advocated by the US has sent multiple shockwaves to the value proposition and policy orientation of multilateralism upheld by Europe. In the economic and trade field, the US has wantonly wielded its stick by waging trade wars frequently, while Europe has championed the international economic order based on free trade, multilateralism and international law, and advocated dispute settlement through negotiations and consultations instead of extreme pressure.
Major European countries face the reality of “aging”. On December 24, the Brexit deal was concluded, finalizing the leaving of one member of the troika and bringing profound impacts to Europe’s political and economic situation. Long-standing problems in France cannot be resolved easily. The German economy remains weak. Promoting European integration is getting more difficult. Europe stands for globalization and economic interdependence, and against
unilateral attempts of decoupling. On the reform of the WTO and other international governance institutions, Europe advocates progressive reform based on the existing international system, rather than reinvent the wheel.
US-Russia relations have been running at a low level. In May 2020, the Trump administration pulled out of the Open Skies Treaty, going further astray. Without the INF Treaty , the New START Treaty signed in 2010 and due to expire in 2021 has become the only arms control treaty between the US and Russia. However, the US has been reluctant to extend it. These unilateral measures have laid bare American attempts to secure military hegemony, and undermined global strategic stability and regional security. In addition to sanctions against Russia, the US has confronted with Russia on NATO enlargement, the Ukraine crisis, the Iranian nuclear issue, and the Syria crisis. Wrestling between the two countries has also been manifested in information and cyberspace, deep sea, and polar regions, among others.
Steady progress has been made in China-Russia relations. In their phone calls, the two heads of state have reaffirmed mutual support and expressed their willingness to strengthen comprehensive strategic coordination. The two countries have maintained coordination and cooperation on major international and regional issues, and advanced economic and trade cooperation. They have stood by each other in fighting the coronavirus and opposing politicizing and stigmatizing the virus. At the annual press conference, President Putin resolutely refuted groundless claims of the so-called “China virus”, and stressed the need for solidarity in fighting the pandemic and the shared interests of Russia and China on many issues. As China-Russia comprehensive strategic partnership of coordination for a new era continues to deepen, it has become an important stabilizing factor in a turbulent world.
Adjustment of American Strategy amid Intensified China-US Rivalry
The changing balance of power and relations between China and the US represent the essential variable in the world. The Trump administration regards China as its primary challenge. Rivalry between the two countries has become the focus of major country competition. Since the COVD-19 outbreak, some American politicians have used the epidemic to stigmatize China. Secretary of State Mike Pompeo has taken rivalry with China as an all-out confrontation between two systems that bears on the future of humanity. In August, the US stepped up blockade against Huawei technologies, adding Huawei’s 38 subsidiaries across 21 countries onto its entity list. In September, the Republican-led China Task Force and the Democratic-led Intelligence Committee respectively released independent reports on China, calling for a review on relations with China. Calling China a “generational threat”, the reports laid out suggestions to move supply chains of key industries far away from China, and impose restrictions on Chinese investment. The US’ mounting containment and crackdown measures against China cover such fields as high-tech, emerging industries, trade disputes, cyber security and people-to-people exchanges. Additionally, it has also ramped up intervention in China’s domestic affairs, particularly on the Taiwan question, Hong Kong issue and Xinjiang issue.
In the Asia-Pacific and China’s neighborhood, the US, with a cold-war mentality, has pursued confrontation and geopolitical maneuvering through its Indo-Pacific strategy to maintain hegemony. It has leveraged the International Finance Corporation, The Millennium Challenge Corporation and other development financial institutions to press ahead with the Indo-Pacific strategy. In late October, the US signed the Basic Exchange and Cooperation Agreement (BECA) with India to share geospatial intelligence and strengthen military cooperation. Australia has followed the US in provoking China on multiple fronts. In early November, the US, Japan, India and Australia held a joint naval exercise named Malabar Exercise 2020 in the Bay of Bengal. These attempts by the US to draw others to its Indo-Pacific strategic layout have compromised cooperation in the region. That said, the US vision for a “mini-NATO” in the Asia-Pacific region can hardly be achieved because of different interpretations on what the Indo-Pacific strategy entails.
In the South China Sea region, the US has conducted navigation missions on a more regular basis, and increased the presence of its Air Force, Coast Guard, and Marine Corps. It has also obstructed COC consultations between China and ASEAN countries, and hyped up the issue of Diaoyu Islands in collaboration with right-wing forces in Japan to jeopardize China-Japan relations. As COVID-19 ravages across the world, the US has discredited China, and provoked ideological confrontation by influencing public opinion in China’s neighborhood.
2020 was the year for both the presidential election and the Senate and House election of the US. Partisan politics have exerted a huge impact on America’s foreign policy. The White House has imposed sanctions against Chinese companies once and again. The US Congress has been planning for the Pacific Deterrence Initiative and other bills targeting at China. It has repeatedly hyped up the Taiwan question, with senior officials like the Health Secretary and Under Secretary of State making visits to Taiwan. On November 7, the Democratic candidate Joe Biden announced election victory and the start of the transition process, but the fight between the Democratic Party and the Republican Party continued to shape China-US relations. The Trump administration has acted against China in violation of the One China principle, on visa issuance, and through economic sanctions in its final days to sow discord between the Biden administration and China.
Lingering Regional Issues and Problematic Global Governance
2020 witnessed many geopolitical conflicts, hotspot issues, and challenges,
including rising political risks in the Asia-Pacific region and drastic political changes in some East Asian countries. Japan has welcomed a new Prime Minister. The Tokyo Olympics has been postponed. Following the resignation of Shinzo Abe, Yoshihide Suga faces many tough problems to be resolved. Uncertainties in the Korean Peninsula have been on the rise. US-DPRK disagreement remains despite overall tranquility in the region at first look. Peace and reconstruction remain difficult in Afghanistan because of slow progress of peace talks between the US and Taliban, and the complex domestic conflicts among different factions.
In Southeast Asia, India’s Citizenship Act was amended in 2019, making non-Muslim ethnic minorities eligible to apply for citizenship. Chaos triggered by the amendment extended to 2020. On the border issue, India’s tendency to adventurism became clearer in 2020, manifested by tensions with neighboring countries like China, Nepal and Pakistan. When the world was busy battling against COVID-19, the Indian side instigated border confrontation with China at Galwan Valley and Pangong Lake, resulting in an abrupt downturn in bilateral relations. Several Southeast Asian countries saw political turbulence. Political parties in Malaysia had a fierce fight after the general election, while Myanmar, Indonesia, the ROK and Singapore held elections at different levels.
The situation in Central Asia has also had ups and downs, represented by the conflicts between the US and Iran, and sectarian struggle in the region. Gen. Qasem Soleimani, a senior commander of the Islamic Revolutionary Guard Corps, was killed by the US at the beginning of 2020, and Mohsen Fakhrizadeh, a prominent Iranian nuclear physicist, was assassinated, putting US-Iran relations under strains. After the UAE signed the peace agreement and established diplomatic relations with Israel, Bahrain, Sudan and Morocco also established diplomatic relations with Israel. Two major changes have emerged in the Middle East: conflicts between Arab states and Israel have degraded, while the Sunni-Shia division persists; Israel’s geopolitical environment has improved, but dispute with Palestine remains unresolved. Russia, Turkey, Iran, the US and Europe have been fighting hard over Syria. The post-war arrangement may see greater Russian involvement and less American involvement.
The situation in Eurasia has been far from tranquil. The Kyrgyz parliamentary election has caused social upheaval. Elections in Belarus and Georgia have triggered political instability. Hotspot issues in Transcaucasia have grown acute. Military conflict in the Nagorno-Karabakh region broke out in late September. Despite the current ceasefire under Russian mediation, the feud between Armenia and Azerbaijan, and the big power game behind it will not go away.
Africa’s political and economic outlook is not promising. Northern African countries like Egypt, Algeria and Sudan have experienced domestic turmoil, while Ethiopia’s civil war has caused a large-scale refugee crisis. Several Sub-Saharan African countries have experienced bitter factions. It is estimated that the Africa’s GDP will drop by 1.7%-3.2% in 2020. Major economies in Sub-Saharan Africa have slid into recession. Economic growth in Nigeria and Angola will contract by 4%-5%, and South Africa 8%. With a revenue loss of $65 billion, major oil exporters in the
region will have a negative growth rate of 4.9%.
Latin America also has had a year of political upheaval. The road to development has been bumpy. The pandemic has led regional economies into deep recession. Poverty and unemployment have worsened. Political uncertainties have been mounting. Chile, Ecuador and Bolivia have seen many protests. Political stability in Venezuela has been tested by the standoff between the government and opposition. Peru has faced a constitutional crisis and rising protests. Regional GDP in 2020 may decline by 8%, constituting the worst economic recession in a century. Brazil, Mexico, and Argentina, once promising major economies in Latin America, have descended into recession. According to a World Bank report, the damage caused by COVID-19 to Latin America far outweighs that caused by the Latin America debt crisis in the 1980s and the 2008 global financial crisis.
Non-traditional security challenges remain to be addressed. America’s National Security Strategy priorities major country rivalry over anti-terrorism campaign, thus undermining international and regional cooperation against terrorism. However, grave threats of terrorism as well as intensifying regional, ethnic and religious conflicts have endangered security in Central Asia, South Asia and Southeast Asia. Another security risk factor has been the tense space race between major countries. The challenge of digital currency to sovereign currency has led to increasing financial security risks. Global efforts to mitigate climate change have been slow. Debate around carbon neutrality has been tense. Extreme poverty across the world and food security in Africa have become more acute.
China’s Sense of Responsibility and Increasing Global Influence
In the face of change of the world, spread of the pandemic, setbacks of globalization and intensifying major country competition, China has taken up responsibility and broken new ground in its major country diplomacy.
First, China has balanced epidemic response with further reform and opening up. Since the COVID-19 outbreak, the Communist Party of China(CPC), the Chinese government, and the entire Chinese people have been united as one. A line of defense has been put in place featuring unified command, comprehensive deployment and multidimensional response. To get its own things done, China has pledged to protect employment, people’s basic living needs, market entities, food and energy security, stable industrial and supply chains, and functioning of primary-level communities, and ensure stability of employment, the financial sector, foreign trade, foreign investment, investment and expectations. The goal of eliminating extreme poverty was achieved as scheduled at the year end. China’s deep-sea manned submersible Fendouzhe, or Striver, has set a diving record of over 10,000 meters. Chang’e has returned with Moon samples. Deliberations on the 14th Five-Year Plan, 2035 Long-Range Objectives and other medium-and-long-term blueprints have demonstrated the advantage of China’s political system and decision-making. China has become the champion, practitioner and promoter of a new type of economic globalization in the post-COVID-19 world.
Second, China has upheld multilateralism to enhance mutual trust and boost economic recovery. At the 2020 extraordinary G20 summit on COVID-19 and the 73rd World Health Assembly, President Xi Jinping called for the building of a Global Community of Health for All. China has lent WHO timely support, and sent medical expert teams and medical supplies to many countries and regions. It has worked for the stability of regional industrial and supply chains and for new business models and forms by seeking complementarity between the Belt and Road Initiative and development strategies of relevant countries. After 8 years of negotiations, the RCEP was concluded at the end of 2020, marking the establishment of the largest free trade zone in the world. The China-EU Investment Agreement has been reached as expected. These two breakthroughs have added confidence and driving forces to economic recovery and social development in the region and beyond.
Third, China has safeguarded international fairness and justice to promote regional peace and stability. In his speech marking the 75th anniversary of the founding of the United Nations, President Xi Jinping noted that the UN must stand firm for justice, uphold the rule of law, promote cooperation, and focus on real action. He also promised that China would continue to be a true follower of multilateralism, stay actively engaged in reforming and developing the global governance system, and promote a community with a shared future for mankind. These words have shown China’s sense of responsibility as a major country. President Xi has also expounded on China’s propositions at other multilateral events such as the 12th BRICS Summit and the G20 Summit. China has firmly upheld the basic norms governing international relations, national interests and national dignity, and strongly rejected power politics and unilateral bullying, which has contributed to the building of a new type of international relations and the community with a shared future for mankind.
In a nutshell, the world has entered a period of turmoil and shifts in 2020, marked by accelerated evolution in the once-in-a-century changes, the unexpected global outbreak of COVID-19, turbulence of geopolitics, and unprecedented headwinds against economic globalization. Profound adjustment has been recorded in the balance of power. The rise of the East and decline of the West have been the hallmark of the changing geopolitical landscape. In the final year to the completion of the first centenary goal, China has embraced dangers and secured steady progress of its major country diplomacy, which has created an enabling external environment for national development, and added positive energy to a troubled world.