In his address to the United Nations General Assembly in late September 2015, Chinese President Xi Jinping advocated for a new type of international relations that is based on practical win-win cooperation (“Chinese president advocates,” 2015). While such a mode of international cooperation will be new for countries whose interactions with the rest of the world are calculated on the basis of zero-sum competition, practical win-win cooperation has in fact long been the mode of international relations practiced by China in its bilateral relations with other developing countries (Lim, 2015b; Lim, 2015d). This mode of international cooperation can be seen in China’s recently announced “Six 100s” global initiative which will feature the establishment of anti-poverty programs across the developing world, including programs in agriculture, climate change mitigation, education, health, and vocational training (“Chinese president announces,” 2015). Apart from overseas development assistance (ODA), practical win-win cooperation also takes the form of economic investment, and China has become the world’s third-largest source of foreign direct investment (FDI), with Chinese FDI amounting to US$116 billion in 2014. Chinese FDI is increasingly directed towards emerging economies in the developing world, especially those involved with China’s “Belt and Road” development framework (“Belt and Road,” 2015). Practical win-win cooperation can also be seen in the economic projects established during President Xi’s recent state visits to the UK, Vietnam, and Singapore.
The showpiece economic cooperation agreement that was signed during President Xi’s October 2015 state visit to the UK was Chinese investment in the Hinkley Point C nuclear power station, the first nuclear power plant to be constructed in the UK in over 20 years. Costing an estimated US$28 billion, this energy megaproject will commence operations in 2025, and will supply almost 6 million homes with 3.3 GW of electricity, an output greater than that of other power plants in the UK. The Chinese state-owned consortium China General Nuclear Corporation will invest US$9 billion for a 33.5 percent stake in the project, whose majority stakeholder is Électricité de France. Hinkley Point C represents the largest inflow of FDI into the UK, and its construction will generate 25,000 jobs. At the level of technology transfer and human resource development, the UK’s energy sector will benefit from China’s nuclear energy expertise. Outside of nuclear energy, China is also engaged in practical cooperation with the UK in other projects in the energy sector, including a multibillion US dollar liquefied petroleum gas agreement between BP and the Chinese energy firm Huadian, and a US$460 million contract for China Harbor Engineering Company to construct the world’s first tidal energy power plant at Swansea Bay. Chinese firms have also invested in solar and wind power projects in the UK (De Rivaz, 2015; Jiang, 2015; Wang, 2015a). Outside of the energy sector, other agreements signed during President Xi’s visit include the satellite firm Inmarsat’s preliminary agreement to deliver satellite mobile broadband across China; a US$2.4 billion deal between Rolls Royce and China’s Hainan Airlines for engine services; and an US$869 million shipping deal between ICBC Financial Leasing and BP Shipping (Barton, 2015; Wang, 2015b; “ICBC Leasing,” 2015).
The Chinese and British governments are studying the feasibility of establishing a London-Shanghai stock connect.
While the US$62 billion cumulative value of the economic cooperation agreements signed during President Xi’s visit have led the Chinese media to describe Sino-UK relations as having entered a “golden age,” such cooperation between the Chinese and British is not new. Manchester’s Airport City, which President Xi visited during his UK tour, was built by an international consortium that included Beijing Construction Engineering Group (“Beijing-Manchester,” 2015). Indeed, the UK has become a major destination for Chinese FDI, and with Chinese FDI into the UK increasing by 85 percent over the past 5 years, the UK is now the largest destination for Chinese FDI within Europe. While Chinese investors are interested in economic sectors in the UK like energy, infrastructure, telecommunications, real estate, and science and technology, British investors are likewise interested in China, especially since China’s ongoing transition from a manufacturing-based to a consumer-based economy will open investment opportunities in key services sectors like finance, health care, and retail. The British home appliance giant Dyson, for example, is planning an aggressive expansion into the Chinese market (“Dyson plans,” 2015). To facilitate greater equity investment between their economies, the Chinese and British governments are studying the feasibility of establishing a London-Shanghai stock connect (“China, Britain,” 2015). And to further facilitate Sino-UK trade and investment, the British government is supporting not just a Sino-UK free trade agreement (FTA) but also a Sino-EU bilateral investment treaty (Wu & Sun, 2015; “Chinese set,” 2015).
In the financial sector, a significant act of Sino-UK cooperation which occurred in March 2015 was the UK’s decision — despite strong opposition from the US — to join China’s Asian Infrastructure Investment Bank (AIIB) as a founding member. The British decision prompted other Western nations which were interested in the AIIB but wary of US opposition to join the AIIB as well (Lim, 2015d). In the international capital markets, the UK government became the first nation in the West in October 2014 to issue a RMB-denominated bond, attracting almost RMB6 billion in the initial round of orders. This, along with the rapid expansion of RMB trading volume in London’s financial markets, helped to significantly strengthen China’s efforts to internationalize the RMB (Moore & Noble, 2014; Wu & Sun, 2015). Indeed, to expand the offshore RMB debt market, the People’s Bank of China issued its first offshore RMB bond in London in October 2015, timed to coincide with President Xi’s state visit (“Central bank,” 2015). The UK government has also offered its support for China’s application for the RMB to be included in the International Monetary Fund’s Special Drawing Rights (SDR) basket of currencies, facilitating China’s attempt to reduce its dependence on the USD. Such strategic cooperation illustrates why the Sino-UK bilateral relationship has been elevated to a “global comprehensive strategic partnership for the 21st Century” (Bai & Hu, 2015; “IMF set,” 2015).
The relationship between China and Vietnam has long been troubled by disputes over contested maritime boundaries (Lim, 2015c). In his meeting with Vietnamese President Truong Tan Sang during his state visit to Vietnam in early November 2015, President Xi advocated for the resolution of these maritime disputes through bilateral negotiations, with a view of not letting such differences derail practical win-win cooperation between their countries (“China calls,” 2015).
In terms of bilateral trade, China has been Vietnam’s largest trading partner for over a decade, and Vietnam has become China’s second-largest Southeast Asian trading partner, and their trading volume is expected to soon reach US$100 billion (“Xi urges,” 2015). Indeed, Sino-Vietnamese trade reached US$49 billion in the first three quarters of 2015, which is a 16 percent increase from the same period the previous year (“China, Vietnam should,” 2015).
As with their trade potential, the potential for practical win-win cooperation between China and Vietnam has not been fully realized, and President Xi urged the ruling communist parties of both countries to work closer together and to align their respective “Belt and Road” and “Two Corridors and One Economic Circle” development strategies. China and Vietnam did agree on a range of economic cooperation projects, including Chinese FDI worth US$300 million in a highway project in Quang Ninh province, Chinese ODA worth RMB1 billion for the construction of schools and hospitals, and the feasibility study of a railway in north Vietnam connecting Hanoi, Lao Cai, and Hai Phong (Yuen, 2015; “China ready,” 2015; “China, Vietnam agree,” 2015; “Xi wraps up,” 2015).
The unexpected and historic meeting that took place in Singapore on November 7, 2015 between President Xi and Taiwanese President Ma Ying-jeou — the first ever such meeting between China’s and Taiwan’s top leaders — can be seen as an attempt by China to reshape cross-strait relations to emphasize practical win-win cooperation. Indeed, both Presidents Xi and Ma highlighted the importance of cooperation for the “revitalization” and “rejuvenation” of the Chinese nation (Tiezzi, 2015; “Xi-Ma meeting,” 2015). For Singapore, its selection by China and Taiwan to be the venue for this meeting highlights not just its global position as a preferred diplomatic hub, but also its central position as a key financial and services hub within China’s growing “Belt and Road” network of international economic cooperation (Watts, 2015; “China, Singapore enhancing,” 2015).
Sino-Singaporean trade has increased 28 times over the past two decades, and reached almost US$80 billion last year.
Also, during his state visit to Singapore, President Xi and Singaporean Prime Minister Lee Hsien Loong agreed to begin negotiations on upgrading the 7 year-old FTA between China and Singapore. Sino-Singaporean trade has increased 28 times over the past two decades, and reached almost US$80 billion last year. In terms of investment, Singapore already is China’s largest source of FDI, with a cumulative FDI worth US$72.3 billion between 1990 and 2014. An upgraded FTA promises to further expand and deepen Sino-Singaporean economic cooperation, including trade and investment (“China, Singapore ink,” 2015). President Xi also announced that the China and Singapore will be cooperating on an intergovernmental project based in Chongqing, following two earlier intergovernmental projects in Suzhou and Tianjin (Kor & Chew, 2015). The Chongqing project will not only elevate Sino-Singaporean economic cooperation, especially the key economic sectors of aviation, finance, information technology, logistics and transportation, it will also offer Singaporean investors a gateway into China’s “Belt and Road” development framework (“China, Singapore agree,” 2015). Indeed, President Xi and Singaporean President Tony Tan Keng Yam agreed that China and Singapore share an “all-round partnership that progresses with the times,” a significant phrase which highlights Singapore’s historic role in helping to shape China’s economic transformation from Maoism to capitalism, and which will also be the basis for future Sino-Singaporean cooperation (Kor, 2015; “China, Singapore resolute,” 2015; “Xi’s visit,” 2015).
This paper was originally published in Eurasia Review (Lim, 2015a). Since that time of writing, UK Prime Minister David Cameron has expressed his government’s intention to further strengthen Sino-UK relations, not just in bilateral trade and investment, but also in cooperative ventures in key sectors like education and infrastructure (“UK PM,” 2016). Economists in Singapore, in the meantime, have warned that the city state will be impacted by China’s economic slowdown, and that businesses in sectors like oil and gas will have to explore ways to adjust to falling Chinese demand (Chong & Chia, 2016). The Singapore government, in the meantime, continues to attract Chinese enterprises, including those in digital industries, to expand their businesses in Singapore (Chong, 2016). In Vietnam, the recent re-election of Nguyen Phu Trong, who is recognized as being pro-Beijing, to a second term of office as general secretary of the Vietnamese Communist Party, has signaled to observers that the Vietnamese government intends to seek an improvement in Sino-Vietnamese relations (Rappai, 2016; Van Sant, 2016).
Bai, T., and Hu, W. (2015, October 23). UK backs yuan’s SDR entry. Global Times. Retrieved from http://www.globaltimes.cn/content/948582.shtml
Barton, J. (2015, October 23). Chinese President wraps up third day in Britain. CCTV News. Retrieved from http://english.cntv.cn/2015/10/23/VIDE1445566688403192.shtml
Beijing-Manchester link to cement China-UK infrastructure alliance. (2015, October 24). Xinhua. Retrieved from http://www.globaltimes.cn/content/948782.shtml
Belt and Road helps China become net capital exporter: report. (2015, October 22). Xinhua. Retrieved from http://news.xinhuanet.com/english/2015-10/22/c_134740843.htm
Central bank issues 1st offshore RMB bond in London. (2015, October 21). China Daily. Retrieved from http://www.china.org.cn/business/2015-10/21/content_36849455.htm
China, Britain support feasibility study on Shanghai-London stock connect. (2015, October 22). Xinhua. Retrieved from http://www.globaltimes.cn/content/948494.shtml
China calls for closer maritime cooperation with Vietnam. (2015, November 6). Xinhua. Retrieved from http://www.globaltimes.cn/content/951286.shtml
China ready to promote party-to-party communication with Vietnam: Xi. (2015, November 6). Xinhua. Retrieved from http://www.globaltimes.cn/content/951234.shtml
China, Singapore agree to lift ties, upgrade FTA. (2015, November 6). Xinhua. Retrieved from http://www.globaltimes.cn/content/951294.shtml
China, Singapore enhancing practical cooperation for strategic development. (2015, October 12). Xinhua. Retrieved from http://www.globaltimes.cn/content/946626.shtml
China, Singapore ink deal on FTA upgrading. (2015, November 7). Xinhua. Retrieved from http://www.globaltimes.cn/content/951362.shtml
China, Singapore resolute in shaping closer, customized partnership. (2015, November 7). Xinhua. http://www.globaltimes.cn/content/951334.shtml
China, Vietnam agree on feasibility study of railway project. (2015, November 6). Xinhua. Retrieved from http://www.globaltimes.cn/content/951210.shtml
China, Vietnam should maintain status quo in East Sea, Party Chief Trong tells President Xi. (2015, November 5). Thanh Nien News. Retrieved from http://www.thanhniennews.com/politics/china-vietnam-should-maintain-status-quo-in-east-sea-party-chief-trong-tells-president-xi-53336.html
Chinese president advocates new type of int’l relations. (2015, September 29). Xinhua. Retrieved from http://www.globaltimes.cn/content/945052.shtml
Chinese president announces major anti-poverty initiative. (2015, September 27). Xinhua. Retrieved from http://english.cntv.cn/2015/09/27/ARTI1443322001252293.shtml
Chinese set to invest $13b in UK property. (2015, October 22). China Daily. Retrieved from http://www.china.org.cn/business/2015-10/22/content_36861306.htm
Chong, K. P. (2016, January 20). Chinese digital firms can plug into region via Singapore. Straits Times. Retrieved from http://www.straitstimes.com/business/companies-markets/chinese-digital-firms-can-plug-into-region-via-singapore
Chong, K. P., and Chia, Y. M. (2016, January 17). For Singapore, a new normal. Straits Times. Retrieved from http://business.asiaone.com/news/singapore-new-normal
De Rivaz, V. (2015, September 21). Why we should welcome Chinese investment in the UK’s nuclear programme. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/energy/11880767/Why-we-should-welcome-Chinese-investment-in-the-UKs-nuclear-programme.html
Dyson plans clean sweep in China. (2015, October 22). China Daily. Retrieved from http://www.china.org.cn/business/2015-10/22/content_36860516.htm
ICBC Leasing signs $869m oil vessel deal. (2015, October 22). Global Times. Retrieved from http://www.globaltimes.cn/content/948538.shtml
IMF set for green light on China’s yuan joining currency basket: Sources. (2015, October 25). Reuters. Retrieved from http://www.cnbc.com/2015/10/25/imf-set-to-give-green-light-on-yuan-joining-currency-basket-sources.html
Jiang, J. (2015, October 24). Xi wraps up ‘golden’ UK trip. Global Times. Retrieved from http://www.globaltimes.cn/content/948727.shtml
Kor, K. B, (2015, November 7). S’pore, China to be ‘all-round partners.’ The Straits Times. Retrieved from http://news.asiaone.com/news/singapore/spore-china-be-all-round-partners
Kor, K. B., and Chew, H. M. (2015, November 6). Third Singapore-China joint project to be based in Chongqing. The Straits Times. Retrieved from http://www.straitstimes.com/singapore/third-singapore-china-joint-project-to-be-based-in-chongqing-president-xi-jinping
Lim, A. C. H. (2015a, November 9). A new type of international relations: Xi Jinping’s 2015 state visits to UK, Vietnam and Singapore. Eurasia Review. Retrieved from http://www.eurasiareview.com/09112015-a-new-type-of-international-relations-xi-jinpings-2015-state-visits-to-uk-vietnam-and-singapore-analysis/
Lim, A. C. H. (2015b, March 15). Africa and China’s 21st Century Maritime Silk Road. The Asia-Pacific Journal, 13(10). Retrieved from http://apjjf.org/2015/13/10/Alvin-Cheng-Hin-Lim/4296.html
Lim, A. C. H. (2015c, September 16). Recent developments in Sino-Vietnamese relations. Eurasia Review. Retrieved from http://www.eurasiareview.com/16092015-recent-developments-in-sino-vietnamese-relations-analysis/
Lim, A. C. H. (2015d, April 19). The US, China and the AIIB: From zero-sum competition to win-win cooperation? Eurasia Review. Retrieved from http://www.eurasiareview.com/19042015-the-us-china-and-the-aiib-from-zero-sum-competition-to-win-win-cooperation-analysis/
Moore, E., and Noble, J. (2014, October 14). UK takes first orders for debut renminbi bond. Financial Times. Retrieved from http://www.ft.com/intl/cms/s/0/8d157620-5388-11e4-929b-00144feab7de.html
Rappai, M. V. (2016, February 9). Vietnam opts for continuity, and an even keel with China. The Wire. Retrieved from http://thewire.in/2016/02/09/vietnam-opts-for-continuity-and-an-even-keel-with-china-21136/
Tiezzi, S. (2015, November 7). China and Taiwan Leaders emphasize kinship, 1992 Consensus in Historic Talks. The Diplomat. Retrieved from http://thediplomat.com/2015/11/china-and-taiwan-leaders-emphasize-kinship-1992-consensus-in-historic-talks/
UK PM David Cameron expects stronger ties with China in 2016. (2016, February 9). Times of India. Retrieved from http://timesofindia.indiatimes.com/world/uk/UK-PM-David-Cameron-expects-stronger-ties-with-China-in-2016/articleshow/50912291.cms
Van Sant, S. (2016, January 27). Vietnam political transition may improve China ties. VOA. Retrieved from http://www.voanews.com/content/vietnam-political-transition-may-improve-china-ties/3164543.html
Wang, H. (2015a, October 27). Fruitful China-Britain energy cooperation sets model for global climate battle. Xinhua. Retrieved from http://news.xinhuanet.com/english/2015-10/27/c_134754259.htm
Wang, W. (2015b, October 22). Rolls-Royce signs $2.4 billion engine agreement with HNA Group. China Daily. Retrieved from http://www.chinadaily.com.cn/business/2015-10/22/content_22255326.htm
Watts, J. M. (2015, November 7). China-Taiwan summit a success for Singapore. Wall Street Journal. Retrieved from http://blogs.wsj.com/chinarealtime/2015/11/07/china-taiwan-summit-a-success-for-singapore/
Wu, X., and Sun, Y. (2015, October 24). China-Britain joint efforts on economic resurgence benefit Europe, world. Xinhua. Retrieved from http://news.xinhuanet.com/english/2015-10/24/c_134745817.htm
Xi-Ma meeting hailed as ‘historic page’ in cross-Strait relations. (2015, November 7). Xinhua. Retrieved from http://news.xinhuanet.com/english/2015-11/07/c_134793272.htm
Xi urges China, Vietnam to work together towards bright future. (2015, November 6). Xinhua. Retrieved from http://www.globaltimes.cn/content/951203.shtml
Xi wraps up Vietnam visit after harvesting fruitful outcomes. (2015, November 7). Xinhua. Retrieved from http://www.globaltimes.cn/content/951329.shtml
Xi’s visit pushes China-Singapore ties to new height. (2015, November 8). Xinhua. Retrieved from http://www.globaltimes.cn/content/951404.shtml
Yuen, Y. L. (2015, November 6). Xi eyes stronger ties with Vietnam. Global Times. Retrieved from http://www.globaltimes.cn/content/951153.shtml