Multilateral cooperation and the example of China

In the name of promoting multilateral infrastructure, China strategically pitches its initiatives as 'win-win' cooperation, while pursuing its own economic and political agenda.

Multilateral cooperation and the example of China

In 3 questions, Sadia Rahman and Aravind Yelery evaluate the possibilities for China's commitment to nominal multilateralism.

  • How can we define multilateral cooperation?

Multilateralism, in the post-war period, was the prime mover behind globalization and a liberal mindset. In principle, multilateral cooperation ensures integration and transparency and brings in benefits of governance. Over the past decades, multilateralism encouraged the promotion of reciprocity through resolving conflicts. The end of the Cold War further deepened the idea of multilateralism.

Multilateral cooperation overtook limited alliances through collaboration and partnerships. This led to successes in a wide range of areas, including health, trade, sustainable development, climate change, and the resolution of political crises. Thus, multilateral cooperation emerged as a practical method to bring international order.

With the wider networking that the world has entered, multilateralism was preferred over unilateral or bilateral collaboration, maximizing gains and minimizing losses. However, presently, with competition among regional powers, key actors, and other stakeholders, multilateral cooperation has become more complex. Trying to reform multilateralism is likely to create drift among countries. For example, we can look at China's rationale in setting up nominal multilateralism and its ambitious foreign policy agenda.

  • When did China’s multilateralism begin?

China's multilateralism began when it became a member of the Asia-Pacific Economic Cooperation (APEC) in 1991, a dialogue partner of the Association of Southeast Asian Nations (ASEAN) in 1996, and joined the World Trade Organization (WTO) in 2000. It soon wanted international attention and established cooperation formats such as the Forum on China-Africa Cooperation (FOCAC) in 2000, the Macau Forum in 2003, and the China-Arab States Cooperation Forum in 2004 to advance its economic, political, and normative goals. It also leads the Shanghai Cooperation Organization, the China-Central and Eastern Cooperation Framework, also known as 16+1 (2012), the China-Community of Latin America and Caribbean States (CELAC) (2015), and several others. These multilateral cooperative forums serve as political mechanisms for China in the absence of a strong opponent.

Similarly, after becoming the world's second-largest economy in 2010, China has started to dominate institutions such as the World Bank, International Monetary Fund (IMF), and UN. China made itself an indispensable participant and contributor to the UN. Its efforts to make Special Drawing Rights (SDR) a reserve currency to weaken the dollar's role, and ensure more influence for itself, have not, however, so far succeeded. On the other hand, China beat G-7 nations like Canada and Italy as a major donor to the World Bank in 2019.

In order to reform the global governance system, China established and still dominates the Asian Infrastructure Investment Bank (AIIB) (2015) and Belt and Road Initiative, launched in 2013. It propounds President Xi's vision of "forging ahead" (fenfa youwei) through these formats. Fenfa youwei contrasts with Deng Xiaoping's approach of "keeping a low profile" (taoguang yanghui). China is retaliating to its past exclusion by excluding the West in multilateral cooperation.

  • Will China commit to multilateralism?

China's emphasis on Western influence in multilateral organizations displays its anxiety. Beijing wants to hit Western institutions that protect their interests by excluding China. To balance Western influence on multilateralism, China has tried to create cracks in the existing system by building a parallel system where it establishes the rules of engagement to its advantage.

China claims that its objective is to create a "community of a shared future of mankind" by openly declaring that its aim is to emphasize that the "international rules should be written by all states" collectively. China wants to do away with the present multilateral systems. It links such amendments to the need for global governance. Slowly, China has moved towards greater aspirations of governance by changing the work style of multilateralism. In the name of promoting multilateral infrastructure, China strategically pitches these initiatives as "win-win" cooperation, while pursuing its own economic and political agenda.

The Belt and Road Initiative is an apt example of nominal multilateralism. China has been pursuing the BRI and its international partnerships with more than 160 countries. It is an initiative of multilateral cooperation with Chinese characteristics and was further strengthened when the Ministry of Finance and multinational development banks (MDBs) formed the Multilateral Cooperation Center for Development Finance (MCDF) in 2017 as one of its deliverables. In 2020, China established a new MCDF of six states -- China, Saudi Arabia, Egypt, Hungary, Cambodia, and the Philippines -- that promised to contribute $180.2 million. This gave China's new multilateral organizations and the Belt and Road Initiative more financial power.

Beijing plans to use multilateral institutions as a well-measured political tool for projecting power. Its cooperative multilateralism looks more pre-emptive to stake claims over re-institutionalizing these forums. China-backed multilateralism has already displayed the cost. It is evident that China shies away from committing itself to the true essence of multilateralism. An important question is about its commitment to global governance, especially when competition with America looms large in its strategies. Thus, China’s pursuit of influence through multilateralism is well underway, however costly it may prove.

AA/Sadia Rahman, Aravind Yelery