The surprising popularity of President Xi Jinping’s signature Asian Infrastructure Investment Bank (AIIB) signals a breakthrough in China’s foreign policy. When China first entered the World Trade Organization in 2001, China struggled to learn how to enhance its image and build influence within the existing international governance framework. A decade and a half after, President Xi Jinping’s agenda clearly goes beyond that traditional framework. Foreign policy now plays an unprecedented role in China’s national strategy. From “keeping a low profile” to proactive diplomacy, China’s foreign policy vigorously secures and advances China’s business and security interests abroad. From “game player”, China is increasingly transforming itself to a “game maker” in shaping regional and international institutions, norms, standards, and concepts, via empowering charismatic speakers, utilizing demonstration effect to attract more support and harnessing the power of social media.
Compared to his predecessors, President Xi has personally attached great importance to China’s foreign policy, reflected by his frequent state visits, confident public speeches and active public diplomacy programs. As China advances its national interests abroad, aside from the MFA, more central government agencies, provincial governments, State-Owned Enterprises as well as non-governmental stakeholders become increasingly involved in China’s foreign policy formation and implementation. A recent example of the success of this more proactive foreign policy is the Asian Infrastructure Investment Bank (AIIB).
How did the AIIB become popular?
During his visit to Indonesia in October of 2013, President Xi Jinping raised the possibility of establishing a multilateral investment bank to support infrastructure developments in Asia. A year later, China signed a Memorandum of Understanding (MoU) in October of 2014 establishing the Asian Infrastructure Investment Bank (AIIB) with 21 countries including India, Saudi Arabia, Thailand and Singapore. At its core, the AIIB is designed to facilitate and fund the “One Belt One Road” strategy to connect Asia, Middle East and Europe with massive infrastructure and transport networks (Xinhua, October 24, 2014).  At first, the number of countries grew slowly and was limited to Asian countries. Meanwhile the United States strongly opposed the AIIB, counseling its allies not to join the AIIB. Only seven countries applied to the AIIB in the first five months. However, on March 12, UK’s application to the AIIB marked a turning point and the “unexpected” victory of China’s foreign policy. Following the UK, major European economies, including France, Germany, Italy, Switzerland and Denmark all announced to apply for memberships. From March 12 to March 30, 15 countries signed up for the AIIB within two weeks. Despite U.S. pressure, 57 countries across Asia, Middle East, Europe and Latin America have filed their applications to the AIIB as founding members. Among them, 50 signed the AIIB agreement on June 29 and a USD 100 billion initial capital will be shared among members, with China holding a 26.06% voting power (Xinhua, June 29).
Game maker: new features of China’s foreign policy
Drawing on a close examination of the establishment of the AIIB and recent trends, China’s foreign policy is likely to present the following new features:
First, China deliberately targets and addresses concerns and policy gaps which could not be solved by existing international institutions and multilateral arrangements.
The AIIB is designed to complement and parallel the World Bank and Asian Development Bank (ADB), with focuses on infrastructure development. According to ADB, it is estimated that $8-10 trillion USD will be required in Asia to finance infrastructure from 2010 to 2020 (21st Century Business Herald, March 19). Meanwhile, the ever-increasing economic power of developing countries has put more pressure on the IMF to reform its weighted voting system and give more voting power to emerging economies. However, such reforms have stalled due to American’s blockage and veto power. The China-based AIIB then serves the purpose of filling this gap between existing government structure and developing nations’ needs as well as to and provide alternative funding for Asia’s urgent needs of infrastructure development. In contrast to the US-dominated World Bank and Japan-dominated ADB, China designed the AIIB as a regional funding platform to reflect more interests and voting power, as Asian countries will contribute 70%-75% of the initial fund (China Business Network, May 21).
Similarly, China is progressively increasing diplomatic role on security and peacekeeping in the Middle East. With Obama’s withdrawal of military forces from Iraq and Afghanistan, a power vacuum is created in the Middle East. Along expanding business interests in the Persian Gulf, China is gradually becoming involved as mediator in regional peace talks and negotiations in the Middle East over the past few years. For example, China strengthens its diplomatic ties and security cooperation with Afghanistan. Last October, following Afghan President Ashraf Ghani’s state visit, Beijing for the first time hosted the Fourth Foreign Ministerial Conference of the Istanbul Process on Afghanistan. Premier Li Keqiang delivered the keynote speech (Xinhua, October 31, 2014). High-level leadership exchanges and state visits also become more frequent. In May, Afghanistan Interior Minister Olomi Noorol Haq visited Beijing and held talks with Meng Jianzhu, Director of CCP’s Central Political and Legal Affairs Commission, on mutual commitment to closer anti-terrorism cooperation and maintain regional stability (Xinhua, May 12). During Minister’s Olomi’s visit, China and Afghanistan hosted its first annual ministerial meeting between China’s Ministry of Public Security and Afghanistan’s Interior Ministry (China News, May 13). The new institutional framework will provide regular platforms for China to have frequent exchanges and cooperation with its counterparts in Afghanistan. It has been reported that an informal meeting was held between Afghanistan’s peace envoy and Tailban officials on May 19-20 in Urumqi, Xinjiang province–the hub for China’s ongoing One Belt One Road Strategy (China Daily, May 25). With its close ties with Pakistan, China’s Middle East diplomacy may help the two parties rebuild the possibility for peace talks. In the near future, China is expected to adopt more active and delicate diplomacy in this region, to safeguard its overseas interests and border security, as articulated in its first Military Strategy White Paper (Xinhua, May 26).
Second, China carefully selects speakers with personal charisma and empowers more stakeholders to deliver tailored strategic messages of its foreign policy to both domestic and foreign audiences.
China appointed Jin Liqun as the General Secretary of AIIB’s Multilateral Interim Secretariat, who has solid financial background in the Ministry of Finance, World Bank ADB, and China Investment Corporation. However, based on the comments and observations of journalists and diplomats, Jin is more like a diplomat than a traditional economist and has demonstrated personal charisma and deft diplomatic tactics (Beijing News, October 24, 2014). As reported by the Financial Times, speaking with perfect English and workable French, Jin spent months settling differences among members of the EU in his attempts to convince them to join the AIIB (21st Century Business Herald, April 11). In a parallel effort, China also empowered its think tanks and research institutes to organize a series of seminars, conference and workshops on the AIIB to the foreign diplomatic, international organizations and correspondents’ community in Beijing (Caijing, April 6). Prior to the application deadline, China’s active diplomacy to leverage diversified platforms succeeded in showcasing the benefits for countries joining the AIIB. In the process, China carefully designed and delivered its messages in a transparent and acceptable way for targeted foreign audiences with credible speakers and representatives to promote China’s foreign policy. For example, the AIIB recruited several well regarded experts in its international advisory council, including former World Bank legal expert Natalie Lichtenstein and former advisor to New Zealand Ministry of Foreign Affairs and Trade Matthew Dalzell (21st Century Business Herald, April 4). These experts function as credible voices and speakers to demonstrate the transparency and governance of the bank.
One impressive speaker for China’s foreign policy is Fu Ying, Chairwoman of National People’s Congress Foreign Affairs Committee. As China’s first female spokesperson for the Two Sessions, Fu Ying changed the stereotype image of Chinese officials to a more approachable and personal style (People.cn, March 4).  Fu Ying previously served as China’s Ambassador to the UK, Australia and the Philippines respectively. Articulating the expanding role of diplomacy in China’s strategy, Fu Ying recently suggested at a scholarly seminar on American policy that China should advance its diplomatic roles as a responsible stakeholder and actively articulate its ideas and purposes to the world in a clearer way (Xinhua, June 4).
Beijing has begun to more regularly publish new white papers with detailed explanations on the purposes, actions and values of its policy messages, including military strategy (Xinhua, May 26) and Tibet policy (Phoenix News, April 16). Starting in November of 2013, the People’s Liberation Army appointed spokespersons for eight major components of its armed forces, including the Ministry of Defense, Navy, Air Force, Second Artillery Force and Armed Police (PAP) (Global Times, December 31, 2014). Members of China’s armed forces command are beginning to give more interviews and deliver speeches. At the recent Shangri-La Dialogue, Sun Jianguo, Deputy Chief of the PLA General Staff delivered a speech on China’s military strategy in promoting peace and security in the Asia Pacific region, as the Head of Chinese delegation (Xinhua, May 31). Prior to President Xi’s state visit to the U.S. in September, China and U.S. have both softened its tone at the Dialogue compared to the last year.
Third, to engage more stakeholders, China often adopts best practice or demonstration effect strategy with intensive media exposure to trigger spillover effect and build partnerships.
The UK’s decision to join the AIIB created a cascade effect on the other European countries (CBN, March 13). In fact, based on media report, negotiations between China and the UK on the AIIB dated back to last summer when Premier Li Keqiang and Vice Premier Ma Kai visited the UK (Caijing, April 6). The demonstration effect of China-UK cooperation expands to the UK’s welcoming attitudes toward China’s outbound direct investment including sensitive industries (Global Times, February 26) and the recent deal on importing China’s nuclear power technology (Xinhua, June 1), followed by high-profile media coverage, while being frequently quoted as successful examples by officials, scholars and journalists to demonstrate the advantages and benefits of China’s policies.
Complementary to the AIIB, China established a $40 billion USD “Silk Road Fund” to provide financial assistance to targeted projects along China’s One Belt One Road. Pakistan’s Karot Hydropower plant was announced as the first investment project of the Silk Road Fund. In a speech, Liu Jinsong, Chairman of the Silk Road Fund revealed Beijing’s intention behind this careful selection. China has longstanding diplomatic and political ties with Pakistan and China is keen to build a successful project, in order to showcase China’s development model and commitment to local infrastructure development (Guancha.cn, May 26). To maximize the impact of these flagship projects, President Xi actively develops the Party’s capacity on public diplomacy. From the beginning, “telling good stories about China through innovative approaches” is set as the core for Xi’s external publicity (Xinhua, August 20, 2013).
Fourth, the Chinese government actively harnesses the power of social media and digital technology to engage young people and enhance its public diplomacy to foreign audiences.
Along with official foreign policy channels, Beijing increasingly uses social media as platform and digital technology as tools to deliver policy messages to targeted audiences inside and outside China, with younger generations as the major focus. To help the general public better understand the policy, China’s media outlets (China Daily, Xinhua News Agency, etc.), government agencies (SASAC, MFA, etc.) and Chinese State Owned Enterprises (the newly consolidated China Railways Rolling Stock Corp.) have created a series of weibo and wechat digital messages with simple text, data and pictures related to the AIIB and OBOR strategy. Instead of political jargon and diplomatic rhetoric, cartoon pictures and videos with Chinese traditional cultural elements such as paintings, poem, history and nature are frequently used to attract younger generations on social networks.
Xi is highly sensitive and aware of the soft power of new media. He has constantly called for integrating traditional media and social media to guide public opinions and serve for the publicity purposes of the Party and state (People.com, June 16). Following Xi’s call, the Party’s United Front Work Department for the first time organized a 10-day intensive training on Internet safety and governance for new media opinion leaders and practitioners in late March (People.com, May 29). It is to the Party’s strategic interests to unleash the power of new media to engage broader audiences to win policy support and restore legitimacy.
A series of video messages called “Following Uncle Xi” were delivered via social platforms to the hosting countries and Chinese public at home, parallel to Xi’s state visits to Russia and Pakistan as well as attendance of Boao Forum and Bandung Conference (Beijing Youth Daily, May 6). The interviews touch upon a selection of bilateral issues in the format of people’s messages, including China’s high-speed trains, tourism, natural gas, winter Olympics, overseas investment, mutual trust, historic memories and cultural links, as well as personal relationships between Putin and Xi (Xinhua, May 5).
Ways ahead: Game changer?
As China’s foreign policy becomes more proactive and pragmatic, as the country’s security interests are increasingly in line with its business interests abroad. Parallel to official diplomatic efforts, China carefully develops a systematic approach to select charismatic and confident speakers including non-government stakeholders and use the power of internet to engage younger generations with softened messages. With bigger voice power and proactive stances, whether China will take a step forward to act as a “game changer” and replace some of existing power structure remains uncertain. China observers are particularly concerned about China’s intentions and actions in the South China Sea. Moreover, when it comes to national security, particularly territory disputes, China’s diplomacy still have a long way to go for both selecting speakers and tailoring its messages. Although well-designed foreign policy could facilitate China to establish new mechanisms such as the AIIB, how to sustain China’s diplomatic and economic influence along the One Belt One Road as a “game maker” poses bigger challenges for both Chinese government and Chinese SOEs abroad.
1. “One Belt, One Road” strategy composed of 21st Century Maritime Silk Road and Silk Road Economic Belt
2. The Two Sessions refer to the annual plenary sessions of the National People’s Congress and the National Chinese People’s Political Consultative Conference, which often hosted in early March each year. During the two sessions, China’s top legislature NPC will lay down national development plan for the next year.
3. Conference on Interaction and Confidence-Building Measures in Asia (CICA) was designed to promote regional peace, security and stability in Asia, initiated by Kazakhstan in 1992. China hosted a high-profile CICA summit in 2014 in Beijing. At the summit, President Xi proposed to host a CICA NGO forum in 2015.
4. From July 8-10, Ufa hosted the 7th BRICS Summit and the 15th meeting of the Shanghai Cooperation Organization.