As the Year of the Dragon begins, it brings opportunities and challenges for China, whose geopolitical dynamics are closely intertwined with global affairs.
Against the backdrop of the ongoing war in Ukraine and the conflict in Gaza, China is at a crossroads in shaping its relationships with major geographic regions such as the Americas, Europe, Russia, Africa, the Middle East and Asia.
The emerging multipolar world order, which highlights the decreasing influence of the unipolar paradigm, emphasizes the importance of China’s diplomatic skills in navigating these turbulent waters.
The rise of China, particularly its economic growth highlighted by its gross domestic product reaching US$17.52 trillion in 2023, has been a significant factor in the Sino-American relationship. However, political posturing and technological skirmishes began to take their toll as their trade fell to $664.4 billion in total volume for the first time in four years.
On the other hand, Washington’s trade deficit with Beijing fell to the lowest in 13 years and stood at $279.4 billion. Furthermore, China is the second-largest foreign owner of US debt, with $769.6 billion as of 2023.
So all of these highlight the interdependence of the world’s two largest economies and make managing their bilateral relationship with care and caution necessary. This will remain true no matter who is in charge of the White House after the upcoming presidential elections.
China and Europe
Last year marked the 20th anniversary of the comprehensive strategic partnership between China and the European Union, established in 2003, with trade reaching $800 billion that year.
Although Beijing’s economic prowess in the European theater has positioned it as a formidable partner, geopolitical tensions, aggravated distrust, and European trade grievances related to perceived unfair treatment have contributed to China’s changing pattern of investment in the region. This means that both parties must engage in open and independent dialogue to manage potential risks and prevent future disappointments.
China and Russia
Russia has emerged as a key strategic partner of China, but their relationship is complex, given the power dynamics at play. While they share a common adversary in the West, they must navigate their relationship carefully.
The two countries have strengthened their bond through shared interests, and their economic entwining is exemplified by the Power of Siberia pipeline and increasing bilateral trade.
Their natural-gas exports recently reached record highs, with bilateral trade hitting $240.1 billion in 2023. This solidifies the deepening alliance between the two giants as they face shifting global dynamics.
China and Asia-Pacific
China’s presence in Asia is undeniable, and its influence is steadily growing. As countries in the region seek economic partnerships and strategic cooperation, they increasingly turn to Beijing.
The Regional Comprehensive Economic Partnership (RCEP) agreement, signed by 15 Asia-Pacific nations in 2020, created a trading bloc representing 30% of the global economy. This has further cemented China’s economic dominance in Asia and presented a united front against protectionist policies.
Trade within the region has reached almost $2 trillion, highlighting China’s pivotal role in the economic landscape and stability of the area.
China and Africa
China’s influence in Africa is growing rapidly, with trade volumes reaching almost $300 billion. As part of its Belt and Road Initiative (BRI), China invests in infrastructure development across the continent, which is expected to spur economic growth.
However, there are concerns about African countries becoming too dependent on Chinese debt, and some worry that China’s efforts could amount to a form of “neocolonialism.” Hence these issues raise important questions about how African nations can balance economic development with protecting their sovereignty.
China and the Middle East
In the Middle East, China has been focusing on resource-rich lands and strategic corridors, as its energy security is closely linked to the region’s stability. In 2022, Beijing’s trade with the region amounted to more than $500 billion, and energy imports were crucial in driving its economic growth.
Additionally, the BRI has extended its influence in the region, with Chinese investments constantly increasing in the Middle East, making their relationship about something more than just oil.
Despite economic interests, China faces diplomatic challenges in balancing stability in the Arab-Israeli arena, including the conflict in Gaza.
In 2023, total trade between China and Israel amounted to more than $20 billion, while trade between China and Palestine was more than $150 million the year before. This suggests that China faces a challenge in promoting its economic interests in the region while dealing with the complexities of the geopolitical situation.
With the ongoing conflict in Gaza, China can showcase its diplomatic skills by acting as a mediator, which could be seen as a replacement for the United States’ inaction.
BRICS
In the complex network of global relationships, the BRICS alliance has emerged as a significant player in shaping the new world order. The combined economic power of Brazil, Russia, India, China and South Africa challenges the Western world’s dominance. The alliance is driven by shared developmental objectives and a commitment to multipolarity, which aims to reform global governance structures.
As of 2023, the BRICS nations were home to more than 40% of the world’s population and contribute to nearly a quarter of the global GDP. The BRICS countries are making efforts to challenge the hegemony of the traditional Western-led institutions such as the International Monetary Fund and the World Bank with initiatives such as the New Development Bank and the Contingent Reserve Arrangement.
In light of the ongoing conflicts in Ukraine and Gaza, China’s diplomatic approach is being tested. The country’s focus on non-interference is consistent with the principles of BRICS, as it seeks to balance supporting its allies and maintaining a neutral position.
Though China’s involvement may be limited to economic and diplomatic efforts, avoiding military engagements demonstrates a commitment to stability and a cautious approach to international conflicts.
The Dragon has emerged as a powerful force in global affairs, casting a shadow that reshapes the international landscape with power and poise. However, this mythical and majestic creature can only succeed if it continues to ignite economic collaborations while carefully controlling its fire to avoid geopolitical conflagration.