According to conventional wisdom, Chinese president Xi Jinping has launched a more ambitious and geopolitically game-changing era of Chinese foreign economic policy. And Beijing is certainly promoting new economic initiatives, from the creation of the Asian Infrastructure Investment Bank (AIIB) to the rollout of the One Belt One Road (OBOR) initiative. But China’s international economic grand strategy under Xi is not new. It is an extension of Beijing’s long-standing Peaceful Development framework from the mid-1990s, which asserts that China’s own development and stability is contingent on shared prosperity with its international economic partners, especially those in the developing world. In fact, the Peaceful Development strategy has not been uniformly successful, and Xi’s expansion of it is likely to create unexpected challenges for China and the world.
Recent analysis from U.S. think tanks and scholars links China’s increasingly assertive behavior in its own neighborhood with its foreign economic policies. CFR Senior Fellow Robert Blackwill and Carnegie Endowment Senior Associate Ashley Tellis argue that China has been systematically but stealthily building leverage over its neighbors, including Washington’s Asian allies, through its trade and investment practices, thus contributing to “the pacification of its extended geographic periphery.” Such assertions conflate worries of China’s assertiveness in the South China Sea with a belief that the AIIB and OBOR will contribute to China’s geoeconomic prowess. This understanding does not do justice to China’s international economic policy track record, however.
In fact, Xi has merely doubled down on the Peaceful Development strategy. This framework is based on a purported virtuous circle: according to this theory, China’s continued economic development depends on a peaceful and stable domestic and international environment. And, in turn, China’s continued development will contribute to international peace, security, and prosperity. Such a win-win framework stands in stark contrast to the views of many outside critics, who worry about Chinese mercantilist trade and investment policies at home and abroad. Since Xi