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Wei Qi

This week marks a climax of China’s chequebook diplomacy as it used its economic clout to achieve breakthroughs in relations with three countries, Norway, Mongolia and the small West African country Sao Tome and Principe.
However, continuing to gain political concessions through expanding outbound investment may not be sustainable, experts warned.
On Monday, China and Norway set aside their squabble over a Nobel Peace Prize awarded to prominent dissident Liu Xiaobo to restore full ties and restart free trade talks. The announcement followed a three-year dialogue to “rebuild trust”, the Norwegian government said.
On Tuesday, Mongolia agreed to no longer host the Dalai Lama, whom Beijing views as wanting to separate Tibet from China, while Sao Tome agreed to sever ties with Taiwan on the same day.

These victories are a result of Beijing’s increasing economic influence and may encourage China to make more use of “chequebook diplomacy.”
Li Mingjiang, an associated professor at the S. Rajaratnam School of International Studies in Singapore, said: “China is more prepared to use its economic power for inducement and cooperation purposes.
Mongolia pledges to halt visits by the Dalai Lama
“China’s economic growth is getting more and more important, and helps China expand its influence and its decision-maker role in major international institutions,” he said, adding that is why many countries have to work with China despite issues of concern, such as human rights.
China pours billions of dollars of investment into Africa every year, with US$2.5 billion of outbound direct investment in African countries in the first 10 months of 2016, according to statistics from the Ministry of Commerce.
Countries along China’s proposed “One Belt, One Road” route – which includes Mongolia – have also been recipients of China’s economic might. As of the end of July 2016, China’s investment in countries along the new Silk Road had reached US$51 billion. The State Council also announced in July a project involving US$50 billion investment in Mongolia.
China has a negative side in using economic leverage to punish states that fall away from Beijing’s political line. It is this element that gives the international community pause and prevents them from fully embracing China
Dr Tang Siew Mun
But experts warn chequebook diplomacy might not remain effective if China failed to complement its economic influence by building trust and expanding its soft power.
“It’s not unreasonable for any country to use its economic advantage to gain political weight,” said Xie Tao, a professor of political science and expert on international relations at Beijing Foreign Language University. “But in the long term, I keep a critical view on this approach.
“A lot of projects China is investing in overseas at the moment are not really making any profits,” he said. “It’s not worth it, particularly when China’s own economy is slowing, and is not going to be sustainable.”
Taiwan losing out in ‘diplomatic war’ with Beijing as Sao Tome severs ties with island
Dr Tang Siew Mun, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, agreed.
“This approach [of chequebook diplomacy] will bring China some degree of influence only as long as Beijing is prepared to keep the cash flowing to recipients. In the short term, this is a viable strategy,” he said.
“The question is how can China transform its economic power and wealth into acceptance and respect by the international community. China has a negative side in using economic leverage to punish states that fall away from Beijing’s political line. It is this element that gives the international community pause and prevents them from fully embracing China.”
Norway and China resume diplomatic ties after 2010 row over Nobel peace prize going to dissident
Zhang Qingmin, a professor of international studies at Peking University, said the Chinese government should also manage the expectations of the domestic audience and avoid giving Chinese the impression that all diplomatic difficulties can be solved with money.
“It is very easy to think all of these diplomatic victories are due to the economic benefits China can provide. But diplomacy is more than that. It’s dangerous to think in this way, particularly if the Chinese people fall into this notion that because our country’s economy is strong, we can get whatever we want from the rest of the world.”


Is China’s chequebook diplomacy sustainable long term?

Chinese workers build a wall at a construction site in Khartoum, Sudan. China pours billions of dollars in investment in Africaeach year. Photo: AFP

The Dalai Lama arrives for ceremonies at the Buyant Ukhaa sports stadium in Ulan Bator, the capital of Mongolia, on November 20, 2016. The Dalai Lama is on a four-day visit to Mongolia, despite Beijing's strident demand that he be barred from entering the country. / AFP PHOTO / BYAMBASUREN BYAMBA-OCHIR

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Beijing’s outbound investment achieves political concessions, but comes with risks, warn experts
