China's premier Li Keqiang told a news conference at the end of the annual session of the National People's Congress that China is concerned about worsening relations on the Korean Peninsula and urged all parties to resume a dialogue. He also said progress has been made toward a solution to territorial disputes in the South China Sea. Photo: AFP/Nicolas Asfouri

Chinese premier Li Keqiang sounded a reassuring note while discussing Beijing’s foreign-policy priorities at the end of the “Two Sessions” annual plenary meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference this week.

In particular, Li confirmed during a news conference that China and the Association of Southeast Asian Nations had made headway in negotiations to solve territorial disputes in the South China Sea. He also voiced concern over the deteriorating situation on the Korean Peninsula, urging all relevant parties to resume a dialogue.

China’s recent moves in the South China Sea and North Korea may suggest a change of tack in its foreign conduct. But Beijing’s current conciliatory attitude toward regional security in East Asia, combined with a lower-than-expected increase in military expenditures in 2017, could be nothing more than a smokescreen.

The South China Sea

On March 8, Chinese foreign minister Wang Yi said that China and ASEAN countries had completed a draft code of conduct for rival claimants in the South China Sea — good news for Southeast Asian coastal states that question Beijing’s growing military assertiveness in that body of water.

Wang’s statement should be taken with a pinch of salt, however. The process to define a code of conduct in the South China Sea may, in fact, derail at any moment, particularly when considering Chinese behavior on the ground. Beijing is said to be moving forward with island-building activities and has stepped up military sorties in the contested area. And Premier Li, speaking to the National People’s Congress on March 5, emphasized that his government was going to “strengthen maritime and air defence as well as border control” — for many, a cryptic reference to the East and South China seas.

North Korea

Last month, in an unusual step, China halted coal imports from North Korea until the end of the year, complying with United Nations resolutions protesting against Pyongyang’s nuclear and missile programs. The North Korean regime depends on trade with China, and coal exports have been its main source of foreign currency.

If effectively enforced, Beijing’s coal ban will deal a hard blow to the Hermit Kingdom, but not a mortal one. In fact, the Chinese leadership has room to put more pressure on North Korean leader Kim Jong-un; for instance, cutting oil and commodity exports to its bellicose “friend” and targeting Chinese banks that act as intermediaries.

More importantly, China could stop providing political cover for Pyongyang. The problem is that Chinese leaders do not want to go that far and risk causing the collapse of its reclusive neighbor, with hordes of North Korean refugees massing at the shared border between the two countries. Beijing still prefers to play a mediating role, as evidenced by the compromise that Foreign Minister Wang Yi recently advanced to ease inter-Korean tensions. But the Americans rejected Wang’s proposal to halt annual US-South Korea joint military drills, in return for the suspension of North Korea’s nuclear- and missile-development program.

Defence budget

Defence spending is the mirror of a country’s strength and can reveal a great deal about its geopolitical ambitions. On March 4, on the second day of the Two Sessions, the Chinese government announced that its military budget would rise by 7% to US$152 billion this year.

This is the lowest annual increase in China’s defence spending since 2000 and reflects the slowing of the country’s long-run economic growth. However, some have seen in Beijing’s decision an attempt to counter accusations that the People’s Liberation Army (PLA) is trying to militarize the Pacific Rim in strategic competition with the US. And this is occurring while President Donald Trump seeks a $54-billion or 10% increase in defence spending.

China is often accused of misrepresenting its military spending, which could be far higher than official documents show. Even taking the numbers at face value, China’s defence outlay would be bigger than all of its regional rivals combined — excluding the US. Further, a single-digit annual increase could well mean that the PLA is now focused on qualitative improvements in its capabilities.

Despite its recent reassuring steps, it is improbable that China will embark on a major foreign-policy shift. Then, lack of progress in relations with Taiwan, border disputes with India in the Himalayan region and maritime controversies with Japan bolsters the idea that a Chinese military build-up and its muscular diplomacy in the Indo-Pacific arena will continue unabated.

Emanuele Scimia

Emanuele Scimia is a journalist and foreign policy analyst. He has written for Asia Times since 2011. His articles have also appeared in the South China Morning Post, the Jamestown Foundation’s Eurasia Daily Monitor, The National Interest, Deutsche Welle, World Politics Review and The Jerusalem Post, among others.

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