Deteriorating Economy Sees China Adopt Softer Diplomatic Tone

Deteriorating Economy Sees China Adopt Softer Diplomatic Tone
Chinese Foreign Minister Qin Gang holds a press conference with the Arab League's Secretary-General (unseen) at the league's headquarters in Cairo, on Jan. 15, 2023. AFP via Getty Images
Kathleen Li
Lynn Xu
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News Analysis

China’s new Foreign Minister Qin Gang is showcasing to the public a “soft” style of diplomacy that is starkly at odds with the hawkish tone of his recent predecessors.

Critics say the sharp shift in the Chinese Communist Party’s (CCP’s) approach to foreign policy may be an attempt by Xi Jinping’s leadership to shake off the current recession and lay “low and weak” when facing the United States to avoid the embarrassment of being completely isolated in terms of its economy and technology sector.

The Chinese economy has long been trapped in a dilemma by the ruling party and has now sunk to its lowest point, Frank Tian Xie, a John M. Olin Palmetto Chair Professor in Business at the University of South Carolina Aiken, told The Epoch Times on Jan. 28.

“The CCP has no way to retreat but alter its wolf warrior diplomacy,” Xie said, citing the current geopolitical and economic climate. For example, the CCP’s support for Russia’s invasion of Ukraine runs counter to the international community, he said.

The 56-year-old new foreign minister will be promoted to be a state-ranking leader as he enters the State Council at the “two sessions” of the Party in the coming March, according to a Jan. 21 report of Hong Kong-based Sing Tao Daily.
Qin was elected to the Central Committee at the Twentieth Party Congress in October 2022, when Xi resecured his third term as leader of the CCP. Two months later, Qin succeeded Wang Yi as China’s new foreign minister on Dec. 30.

CCP’s New Diplomatic Posture

In a sharp U-turn from the CCP’s previous war-mongering diplomacy, Qin’s performance seems to be designed to promote a friendlier tone, with his “low profile” and “softness,” as observed by foreign media late last year.
On Jan. 4, The Washington Post published an article from Qin as he was leaving his post as China’s ambassador to the United States and returning to China as the new foreign minister. Qin said that he had built “sound working relations” with U.S. officials to handle thorny issues like Taiwan.

The CCP’s siding with Russia when it launched its war with Ukraine and its militant moves toward Taiwan have triggered serious concerns in the international community over Taiwan’s security.

Qin wrote that “China-U.S. relations should not be a zero-sum game in which one side out-competes the other, or one nation thrives at the expense of the other. The world is wide enough for China and the United States to both develop and prosper.”

Qin’s soft approach was also showcased during an NBA game, when the league played a pre-recorded video Chinese New Year greeting from the Chinese official, which allowed his message to reach hundreds of thousands of people on Jan. 21. According to Xie, this is one example of the CCP’s influence on organizations like the NBA in exchange for access to the Chinese market.

Facing various internal, foreign, and economic woes, Xi needs to cool tensions with the United States and its allies in the hopes that these countries lower their vigilance toward the CCP’s expansionist goals, Xie said.

He’s replying on Qin’s euphemistic diplomacy and soft gestures to achieve this. “[The CCP] has to lower itself down to ease pressure from the United States,” he added.

Qin succeeded Cui Tiankai as China’s eleventh ambassador to the United States in July 2021.

Chinese Foreign Ministry spokesman Zhao Lijian takes a question at the daily media briefing in Beijing on April 8, 2020. (AFP via Getty Images)
Chinese Foreign Ministry spokesman Zhao Lijian takes a question at the daily media briefing in Beijing on April 8, 2020. AFP via Getty Images

However, Qin’s “soft” diplomatic posturing doesn’t signal any substantial changes in CCP foreign policy.

Asked about the reassignment of former spokesperson Zhao Lijian, the Ministry of Foreign Affairs said on Jan. 10 that it was “in accordance with the needs of his work,” reiterating that China’s foreign policy remains unchanged.

Synonymous with the CCP’s wolf warrior diplomacy, Zhao has not appeared in public since early December last year.

‘Soft Diplomacy’ Stems From Weak Economy

In addition to Qin, China’s Vice Premier Liu He also claimed at the World Economic Forum on Jan. 17 that “China’s doors will only be opened wider and wider” and welcome “more foreign investments.”

Xie believes that China’s economic downturn could be one of the major reasons why the CCP has adopted softer posturing toward the United States.

“Chinese sluggish economy, along with the Russia-Ukraine war and the U.S. blockade of Chinese high-tech products, has left the CCP to encounter unprecedented headwinds in the international environment,” Xie said.

Another vital factor has been the CCP’s irrational “zero-COVID” policies, which have pushed the Chinese economy back 20 years to the level it was at before China joined the WTO.

“In this case, the CCP desperately needs U.S. capital and markets,” Xie added.

Economic Downturn

The Chinese economy is continuing its downward spiral. According to data released by the Bureau of Statistics on Jan. 18, total retail sales of social consumer goods fell by 0.2 percent in 2022 compared to the year prior, including a 1.8 percent year-over-year decline last December.
In addition, the real estate sector, a major driver of the nation’s economy, remained in decline in 2022. Official data released on Jan. 17 indicated that 2022 saw a 10 percent fall in real estate investment and a 9.5 percent drop in residential investment.

Housing construction fell 7.2 percent year-over-year in 2022. Newly-developed housing construction area fell even more, by 39.4 percent year-over-year, with residential construction falling by 39.8 percent. In terms of sales, commercial property sales decreased by 26.6 percent in 2022, while residential property sales decreased 28.3 percent.

However, its widely believed that China’s official data cannot be trusted, given the CCP’s history of falsifying numbers to mislead the public. At this time, it is likely that official data is obscuring the fact that the whole economy is in recession.

A recent example is that China’s GDP grew 2.9 percent year-on-year in the fourth quarter of 2022 as released by China’s Bureau of Statistics—a figure 0.4 percent higher than that in the second quarter.

But U.S.-based China expert Ji Da challenged the accuracy of the official data, telling The Epoch Times on Jan. 25 that in the second quarter of 2022, only Shanghai city was in quarantine, while in October, there was basically a rotation of lockdowns across China that lasted until Dec. 7 when the Communist Party lifted its zero-COVID policy.

More businesses in the cities and regions also ceased operations in the fourth quarter.

“How is this possible [with its GDP getting higher, as the official figures show]?” Ji said, concluding that the data must have been massaged.

Kathleen Li has contributed to The Epoch Times since 2009 and focuses on China-related topics. She is an engineer, chartered in civil and structural engineering in Australia.
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