A New Type Of International Relations: Xi Jinping’s 2015 State Visits To UK, Vietnam And Singapore – Analysis

In his address to the United Nations General Assembly in late September 2015, Chinese President Xi Jinping advocated for a new type of international relations that is based on practical win-win cooperation.1 While such a mode of international cooperation will be new for countries whose interactions with the rest of the world are calculated on the basis of zero-sum competition, practical win-win cooperation has in fact long been the mode of international relations practiced by China in its bilateral relations with other developing countries.2 This mode of international cooperation can be seen in China’s recently announced “Six 100s” global initiative which will feature the establishment of anti-poverty programs across the developing world, including programs in agriculture, climate change mitigation, education, health, and vocational training.3 Apart from overseas development assistance (ODA), practical win-win cooperation also takes the form of economic investment, and China has become the world’s third-largest source of foreign direct investment (FDI), with Chinese FDI amounting to 116 billion USD in 2014. Chinese FDI is increasingly directed towards emerging economies in the developing world, especially those involved with China’s “Belt and Road” development framework.4 Practical win-win cooperation can also be seen in the economic projects established during President Xi’s recent state visits to the UK, Vietnam, and Singapore.

UK

The showpiece economic cooperation agreement that was signed during President Xi’s October 2015 state visit to the UK was Chinese investment in the Hinkley Point C nuclear power station, the first nuclear power plant to be constructed in the UK in over 20 years. Costing an estimated 28 billion USD, this energy megaproject will commence operations in 2025, and will supply almost 6 million homes with 3.3 GW of electricity, an output greater than that of other power plants in the UK. The Chinese state-owned consortium China General Nuclear Corporation will invest 9 billion USD for a 33.5% stake in the project, whose majority stakeholder is Électricité de France. Hinkley Point C represents the largest inflow of FDI into the UK, and its construction will generate 25,000 jobs. At the level of technology transfer and human resource development, the UK’s energy sector will benefit from China’s nuclear energy expertise. Outside of nuclear energy, China is also engaged in practical cooperation with the UK in other projects in the energy sector, including a multibillion USD liquefied petroleum gas agreement between BP and the Chinese energy firm Huadian, and a 460 million USD contract for China Harbor Engineering Company to construct the world’s first tidal energy power plant at Swansea Bay. Chinese firms have also invested in solar and wind power projects in the UK.5 Outside of the energy sector, other agreements signed during President Xi’s visit include the satellite firm Inmarsat’s preliminary agreement to deliver satellite mobile broadband across China; a 2.4 billion USD deal between Rolls Royce and China’s Hainan Airlines for engine services; and an 869 million USD shipping deal between ICBC Financial Leasing and BP Shipping.6

While the 62 billion USD cumulative value of the economic cooperation agreements signed during President Xi’s visit have led the Chinese media to describe Sino-UK relations as having entered a “golden age,” such cooperation between the Chinese and British is not new. Manchester’s Airport City, which President Xi visited during his UK tour, was built by an international consortium that included Beijing Construction Engineering Group.7 Indeed, the UK has become a major destination for Chinese FDI, and with Chinese FDI into the UK increasing by 85% over the past 5 years, the UK is now the largest destination for Chinese FDI within Europe. While Chinese investors are interested in economic sectors in the UK like energy, infrastructure, telecommunications, real estate, and science and technology, British investors are likewise interested in China, especially since China’s ongoing transition from a manufacturing-based to a consumer-based economy will open investment opportunities in key services sectors like finance, health care, and retail. The British home appliance giant Dyson, for example, is planning an aggressive expansion into the Chinese market.8 To facilitate greater equity investment between their economies, the Chinese and British governments are studying the feasibility of establishing a London-Shanghai stock connect.9 And to further facilitate Sino-UK trade and investment, the British government is supporting not just a Sino-UK free trade agreement (FTA) but also a Sino-EU bilateral investment treaty.10

In the financial sector, a significant act of Sino-UK cooperation which occurred in March 2015 was the UK’s decision—despite strong opposition from the US—to join China’s Asian Infrastructure Investment Bank (AIIB) as a founding member. The British decision prompted other Western nations which were interested in the AIIB but wary of US opposition to join the AIIB as well.11 In the international capital markets, the UK government became the first nation in the West in October 2014 to issue a RMB-denominated bond, attracting almost 6 billion RMB in the initial round of orders. This, along with the rapid expansion of RMB trading volume in London’s financial markets, helped to significantly strengthen China’s efforts to internationalize the RMB.12 Indeed, to expand the offshore RMB debt market, the People’s Bank of China issued its first offshore RMB bond in London in October 2015, timed to coincide with President Xi’s state visit.13 The UK government has also offered its support for China’s application for the RMB to be included in the International Monetary Fund’s Special Drawing Rights (SDR) basket of currencies, facilitating China’s attempt to reduce its dependence on the USD. Such strategic cooperation illustrates why the Sino-UK bilateral relationship has been elevated to a “global comprehensive strategic partnership for the 21st Century.”14

Vietnam

The relationship between China and Vietnam has long been troubled by disputes over contested maritime boundaries.15 In his meeting with Vietnamese President Truong Tan Sang during his state visit to Vietnam in early November 2015, President Xi advocated for the resolution of these maritime disputes through bilateral negotiations, with a view of not letting such differences derail practical win-win cooperation between their countries.16

In terms of bilateral trade, China has been Vietnam’s largest trading partner for over a decade, and Vietnam has become China’s second-largest Southeast Asian trading partner, and their trading volume is expected to soon reach 100 billion USD.17 Indeed, Sino-Vietnamese trade reached 49 billion USD in the first three quarters of 2015, which is a 16% increase from the same period the previous year.18

As with their trade potential, the potential for practical win-win cooperation between China and Vietnam has not been fully realized, and President Xi urged the ruling communist parties of both countries to work closer together and to align their respective “Belt and Road” and “Two Corridors and One Economic Circle” development strategies. China and Vietnam did agree on a range of economic cooperation projects, including Chinese FDI worth 300 million USD in a highway project in Quang Ninh province, Chinese ODA worth 1 billion RMB for the construction of schools and hospitals, and the feasibility study of a railway in north Vietnam connecting Hanoi, Lao Cai, and Hai Phong.19

Singapore

The unexpected and historic meeting that took place in Singapore on November 7, 2015 between President Xi and Taiwanese President Ma Ying-jeou—the first ever such meeting between China’s and Taiwan’s top leaders—can be seen as an attempt by China to reshape cross-strait relations to emphasize practical win-win cooperation. Indeed, both Presidents Xi and Ma highlighted the importance of cooperation for the “revitalization” and “rejuvenation” of the Chinese nation.20 For Singapore, its selection by China and Taiwan to be the venue for this meeting highlights not just its global position as a preferred diplomatic hub, but also its central position as a key financial and services hub within China’s growing “Belt and Road” network of international economic cooperation.21

Also, during his state visit to Singapore, President Xi and Singaporean Prime Minister Lee Hsien Loong agreed to begin negotiations on upgrading the 7 year-old FTA between China and Singapore. Sino-Singaporean trade has increased 28 times over the past two decades, and reached almost 80 billion USD last year. In terms of investment, Singapore already is China’s largest source of FDI, with a cumulative FDI worth 72.3 billion USD between 1990 and 2014. An upgraded FTA promises to further expand and deepen Sino-Singaporean economic cooperation, including trade and investment.22 President Xi also announced that the China and Singapore will be cooperating on an intergovernmental project based in Chongqing, following two earlier intergovernmental projects in Suzhou and Tianjin.23 The Chongqing project will not only elevate Sino-Singaporean economic cooperation, especially the key economic sectors of aviation, finance, information technology, logistics and transportation, it will also offer Singaporean investors a gateway into China’s “Belt and Road” development framework.24 Indeed, President Xi and Singaporean President Tony Tan Keng Yam agreed that China and Singapore share an “all-round partnership that progresses with the times,” a significant phrase which highlights Singapore’s historic role in helping to shape China’s economic transformation from Maoism to capitalism, and which will also be the basis for future Sino-Singaporean cooperation.25

Bibliography:
Bai Tiantian and Hu Weijia. “UK backs yuan’s SDR entry.” Global Times, October 23, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/948582.shtml.

Barton, Jack. “Chinese President wraps up third day in Britain.” CCTV News, October 23, 2015. Accessed November 8, 2015. http://english.cntv.cn/2015/10/23/VIDE1445566688403192.shtml.

“Beijing-Manchester link to cement China-UK infrastructure alliance.” Xinhua, October 24, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/948782.shtml.

“Belt and Road helps China become net capital exporter: report.” Xinhua, October 22, 2015. Accessed November 8, 2015. http://news.xinhuanet.com/english/2015-10/22/c_134740843.htm.

“Central bank issues 1st offshore RMB bond in London.” China Daily, October 21, 2015. Accessed November 8, 2015. http://www.china.org.cn/business/2015-10/21/content_36849455.htm.

“China, Britain support feasibility study on Shanghai-London stock connect.” Xinhua, October 22, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/948494.shtml.

“China calls for closer maritime cooperation with Vietnam.” Xinhua, November 6, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951286.shtml.

“China ready to promote party-to-party communication with Vietnam: Xi.” Xinhua, November 6, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951234.shtml.

“China, Singapore agree to lift ties, upgrade FTA.” Xinhua, November 6, 2015. Accessed November 7, 2015. http://www.globaltimes.cn/content/951294.shtml.

“China, Singapore enhancing practical cooperation for strategic development.” Xinhua, October 12, 2015. Accessed November 7, 2015. http://www.globaltimes.cn/content/946626.shtml.

“China, Singapore ink deal on FTA upgrading.” Xinhua, November 7, 2015. Accessed November 7, 2015. http://www.globaltimes.cn/content/951362.shtml.

“China, Singapore resolute in shaping closer, customized partnership.” Xinhua, November 7, 2015. Accessed November 7, 2015. http://www.globaltimes.cn/content/951334.shtml.

“China, Vietnam agree on feasibility study of railway project.” Xinhua, November 6, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951210.shtml.

“China, Vietnam should maintain status quo in East Sea, Party Chief Trong tells President Xi.” Thanh Nien News, November 5, 2015. Accessed November 8, 2015. http://www.thanhniennews.com/politics/china-vietnam-should-maintain-status-quo-in-east-sea-party-chief-trong-tells-president-xi-53336.html.

“Chinese president advocates new type of int’l relations.” Xinhua, September 29, 2015. Accessed November 7, 2015. http://www.globaltimes.cn/content/945052.shtml.

“Chinese president announces major anti-poverty initiative.” Xinhua, September 27, 2015. Accessed November 7, 2015. http://english.cntv.cn/2015/09/27/ARTI1443322001252293.shtml.

“Chinese set to invest $13b in UK property.” China Daily, October 22, 2015. Accessed November 8, 2015. http://www.china.org.cn/business/2015-10/22/content_36861306.htm.

De Rivaz, Vincent. “Why we should welcome Chinese investment in the UK’s nuclear programme.” The Telegraph, September 21, 2015. Accessed November 8, 2015. http://www.telegraph.co.uk/finance/newsbysector/energy/11880767/Why-we-should-welcome-Chinese-investment-in-the-UKs-nuclear-programme.html.

“Dyson plans clean sweep in China.” China Daily, October 22, 2015. Accessed November 8, 2015. http://www.china.org.cn/business/2015-10/22/content_36860516.htm.

“ICBC Leasing signs $869m oil vessel deal.” Global Times, October 22, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/948538.shtml.

“IMF set for green light on China’s yuan joining currency basket: Sources.” Reuters, October 25, 2015. Accessed November 8, 2015. http://www.cnbc.com/2015/10/25/imf-set-to-give-green-light-on-yuan-joining-currency-basket-sources.html.

Jiang Jie. “Xi wraps up ‘golden’ UK trip.” Global Times, October 24, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/948727.shtml.

Kor Kian Beng, “S’pore, China to be ‘all-round partners.’” The Straits Times, November 7, 2015. Accessed November 7, 2015. http://news.asiaone.com/news/singapore/spore-china-be-all-round-partners.

Kor Kian Beng and Chew Hui Min. “Third Singapore-China joint project to be based in Chongqing.” The Straits Times, November 6, 2015. Accessed November 7, 2015. http://www.straitstimes.com/singapore/third-singapore-china-joint-project-to-be-based-in-chongqing-president-xi-jinping.

Lim, Alvin Cheng-Hin. “Africa and China’s 21st Century Maritime Silk Road.” The Asia-Pacific Journal 13 (2015). Accessed November 7, 2015. http://japanfocus.org/-Alvin_Cheng_Hin-Lim/4296.

Lim, Alvin Cheng-Hin. “Recent Developments In Sino-Vietnamese Relations.” Eurasia Review, September 16, 2015. Accessed November 8, 2015. http://www.eurasiareview.com/16092015-recent-developments-in-sino-vietnamese-relations-analysis/.

Lim, Alvin Cheng-Hin. “The US, China And The AIIB: From Zero-Sum Competition To Win-Win Cooperation?” Eurasia Review, April 19, 2015. Accessed November 7, 2015. http://www.eurasiareview.com/19042015-the-us-china-and-the-aiib-from-zero-sum-competition-to-win-win-cooperation-analysis/.

Moore, Elaine and Noble, Josh. “UK takes first orders for debut renminbi bond.” Financial Times, October 14, 2014. Accessed November 8, 2015. http://www.ft.com/intl/cms/s/0/8d157620-5388-11e4-929b-00144feab7de.html.

Tiezzi, Shannon. “China and Taiwan Leaders Emphasize Kinship, 1992 Consensus in Historic Talks.” The Diplomat, November 7, 2015. Accessed November 7, 2015. http://thediplomat.com/2015/11/china-and-taiwan-leaders-emphasize-kinship-1992-consensus-in-historic-talks/.

Wang Haiqing. “Fruitful China-Britain energy cooperation sets model for global climate battle.” Xinhua, October 27, 2015. Accessed November 8, 2015. http://news.xinhuanet.com/english/2015-10/27/c_134754259.htm.

Wang Wen. “Rolls-Royce signs $2.4 billion engine agreement with HNA Group.” China Daily, October 22, 2015. Accessed November 8, 2015. http://www.chinadaily.com.cn/business/2015-10/22/content_22255326.htm.

Watts, Jake Maxwell. “China-Taiwan Summit a Success for Singapore.” Wall Street Journal, November 7, 2015. Accessed November 7, 2015. http://blogs.wsj.com/chinarealtime/2015/11/07/china-taiwan-summit-a-success-for-singapore/.

Wu Xintao and Sun Yi. “China-Britain joint efforts on economic resurgence benefit Europe, world.” Xinhua, October 24, 2015. Accessed November 8, 2015. http://news.xinhuanet.com/english/2015-10/24/c_134745817.htm.

“Xi-Ma meeting hailed as ‘historic page’ in cross-Strait relations.” Xinhua, November 7, 2015. Accessed November 7, 2015. http://news.xinhuanet.com/english/2015-11/07/c_134793272.htm.

“Xi urges China, Vietnam to work together towards bright future.” Xinhua, November 6, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951203.shtml.

“Xi’s visit pushes China-Singapore ties to new height.” Xinhua, November 8, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951404.shtml.

“Xi wraps up Vietnam visit after harvesting fruitful outcomes.” Xinhua, November 7, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951329.shtml.

Yuen Yeuk-laam. “Xi eyes stronger ties with Vietnam.” Global Times, November 6, 2015. Accessed November 8, 2015. http://www.globaltimes.cn/content/951153.shtml.

Notes:
1. “Chinese president advocates new type of int’l relations,” Xinhua, September 29, 2015, accessed November 7, 2015, http://www.globaltimes.cn/content/945052.shtml.

2 Alvin Cheng-Hin Lim, “Africa and China’s 21st Century Maritime Silk Road,” The Asia-Pacific Journal 13 (2015), accessed November 7, 2015, http://japanfocus.org/-Alvin_Cheng_Hin-Lim/4296. Alvin Cheng-Hin Lim, “The US, China And The AIIB: From Zero-Sum Competition To Win-Win Cooperation?” Eurasia Review, April 19, 2015, accessed November 7, 2015, http://www.eurasiareview.com/19042015-the-us-china-and-the-aiib-from-zero-sum-competition-to-win-win-cooperation-analysis/.

3 “Chinese president announces major anti-poverty initiative,” Xinhua, September 27, 2015, accessed November 7, 2015, http://english.cntv.cn/2015/09/27/ARTI1443322001252293.shtml.

4 “Belt and Road helps China become net capital exporter: report,” Xinhua, October 22, 2015, accessed November 8, 2015, http://news.xinhuanet.com/english/2015-10/22/c_134740843.htm.

5 Wang Haiqing, “Fruitful China-Britain energy cooperation sets model for global climate battle,” Xinhua, October 27, 2015, accessed November 8, 2015, http://news.xinhuanet.com/english/2015-10/27/c_134754259.htm. Vincent de Rivaz, “Why we should welcome Chinese investment in the UK’s nuclear programme,” The Telegraph, September 21, 2015, accessed November 8, 2015, http://www.telegraph.co.uk/finance/newsbysector/energy/11880767/Why-we-should-welcome-Chinese-investment-in-the-UKs-nuclear-programme.html. Jiang Jie, “Xi wraps up ‘golden’ UK trip,” Global Times, October 24, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/948727.shtml.

6 Wang Wen, “Rolls-Royce signs $2.4 billion engine agreement with HNA Group,” China Daily, October 22, 2015, accessed November 8, 2015, http://www.chinadaily.com.cn/business/2015-10/22/content_22255326.htm. Jack Barton, “Chinese President wraps up third day in Britain,” CCTV News, October 23, 2015, accessed November 8, 2015, http://english.cntv.cn/2015/10/23/VIDE1445566688403192.shtml. “ICBC Leasing signs $869m oil vessel deal,” Global Times, October 22, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/948538.shtml.

7 “Beijing-Manchester link to cement China-UK infrastructure alliance,” Xinhua, October 24, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/948782.shtml.

8 “Dyson plans clean sweep in China,” China Daily, October 22, 2015, accessed November 8, 2015, http://www.china.org.cn/business/2015-10/22/content_36860516.htm.

9 “China, Britain support feasibility study on Shanghai-London stock connect,” Xinhua, October 22, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/948494.shtml.

10 Wu Xintao and Sun Yi, “China-Britain joint efforts on economic resurgence benefit Europe, world,” Xinhua, October 24, 2015, accessed November 8, 2015, http://news.xinhuanet.com/english/2015-10/24/c_134745817.htm. “Chinese set to invest $13b in UK property,” China Daily, October 22, 2015, accessed November 8, 2015, http://www.china.org.cn/business/2015-10/22/content_36861306.htm.

11 Lim, “The US, China.”

12 Wu and Sun, “China-Britain joint.” Elaine Moore and Josh Noble, “UK takes first orders for debut renminbi bond,” Financial Times, October 14, 2014, accessed November 8, 2015, http://www.ft.com/intl/cms/s/0/8d157620-5388-11e4-929b-00144feab7de.html.

13 “Central bank issues 1st offshore RMB bond in London,” China Daily, October 21, 2015, accessed November 8, 2015, http://www.china.org.cn/business/2015-10/21/content_36849455.htm.

14 Bai Tiantian and Hu Weijia, “UK backs yuan’s SDR entry,” Global Times, October 23, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/948582.shtml. “IMF set for green light on China’s yuan joining currency basket: Sources,” Reuters, October 25, 2015, accessed November 8, 2015, http://www.cnbc.com/2015/10/25/imf-set-to-give-green-light-on-yuan-joining-currency-basket-sources.html.

15 Alvin Cheng-Hin Lim, “Recent Developments In Sino-Vietnamese Relations,” Eurasia Review, September 16, 2015, accessed November 8, 2015, http://www.eurasiareview.com/16092015-recent-developments-in-sino-vietnamese-relations-analysis/.

16 “China calls for closer maritime cooperation with Vietnam,” Xinhua, November 6, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951286.shtml.

17 “Xi urges China, Vietnam to work together towards bright future,” Xinhua, November 6, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951203.shtml.

18 “China, Vietnam should maintain status quo in East Sea, Party Chief Trong tells President Xi,” Thanh Nien News, November 5, 2015, accessed November 8, 2015, http://www.thanhniennews.com/politics/china-vietnam-should-maintain-status-quo-in-east-sea-party-chief-trong-tells-president-xi-53336.html.

19 “China ready to promote party-to-party communication with Vietnam: Xi,” Xinhua, November 6, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951234.shtml. “China, Vietnam agree on feasibility study of railway project,” Xinhua, November 6, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951210.shtml. Yuen Yeuk-laam, “Xi eyes stronger ties with Vietnam,” Global Times, November 6, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951153.shtml. “Xi wraps up Vietnam visit after harvesting fruitful outcomes,” Xinhua, November 7, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951329.shtml.

20 “Xi-Ma meeting hailed as ‘historic page’ in cross-Strait relations,” Xinhua, November 7, 2015, accessed November 7, 2015, http://news.xinhuanet.com/english/2015-11/07/c_134793272.htm. Shannon Tiezzi, “China and Taiwan Leaders Emphasize Kinship, 1992 Consensus in Historic Talks,” The Diplomat, November 7, 2015, accessed November 7, 2015, http://thediplomat.com/2015/11/china-and-taiwan-leaders-emphasize-kinship-1992-consensus-in-historic-talks/.

21 Jake Maxwell Watts, “China-Taiwan Summit a Success for Singapore,” Wall Street Journal, November 7, 2015, accessed November 7, 2015, http://blogs.wsj.com/chinarealtime/2015/11/07/china-taiwan-summit-a-success-for-singapore/. “China, Singapore enhancing practical cooperation for strategic development,” Xinhua, October 12, 2015, accessed November 7, 2015, http://www.globaltimes.cn/content/946626.shtml.

22 “China, Singapore ink deal on FTA upgrading,” Xinhua, November 7, 2015, accessed November 7, 2015, http://www.globaltimes.cn/content/951362.shtml.

23 Kor Kian Beng and Chew Hui Min, “Third Singapore-China joint project to be based in Chongqing,” The Straits Times, November 6, 2015, accessed November 7, 2015, http://www.straitstimes.com/singapore/third-singapore-china-joint-project-to-be-based-in-chongqing-president-xi-jinping.

24 “China, Singapore agree to lift ties, upgrade FTA,” Xinhua, November 6, 2015, accessed November 7, 2015, http://www.globaltimes.cn/content/951294.shtml.

25 Kor Kian Beng, “S’pore, China to be ‘all-round partners,’” The Straits Times, November 7, 2015, accessed November 7, 2015, http://news.asiaone.com/news/singapore/spore-china-be-all-round-partners. “China, Singapore resolute in shaping closer, customized partnership,” Xinhua, November 7, 2015, accessed November 7, 2015, http://www.globaltimes.cn/content/951334.shtml. “Xi’s visit pushes China-Singapore ties to new height,” Xinhua, November 8, 2015, accessed November 8, 2015, http://www.globaltimes.cn/content/951404.shtml.