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NEW REGIONAL
INITIATIVES IN
CHINA’S
FOREIGN POLICY
The Incoming
Pluralism of Global
Governance
Matteo Dian
Silvia Menegazzi
New Regional Initiatives in China’s Foreign Policy
 Matteo Dian · Silvia Menegazzi

New Regional
Initiatives in China’s
Foreign Policy
The Incoming Pluralism of Global Governance
Matteo Dian Silvia Menegazzi
Department of Political Department of Political Science
and Social Sciences LUISS Guido Carli University
University of Bologna Rome, Italy
Bologna, Italy

ISBN 978-3-319-75504-5 ISBN 978-3-319-75505-2 (eBook)

https://doi.org/10.1007/978-3-319-75505-2

Library of Congress Control Number: 2018931911

© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
International Publishing AG, part of Springer Nature 2018
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction
on microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and
information in this book are believed to be true and accurate at the date of publication.
Neither the publisher nor the authors or the editors give a warranty, express or implied,
with respect to the material contained herein or for any errors or omissions that may have
been made. The publisher remains neutral with regard to jurisdictional claims in published
maps and institutional affiliations.

Cover illustration: © John Rawsterne/patternhead.com

Printed on acid-free paper

This Palgrave Macmillan imprint is published by the registered company Springer

International Publishing AG part of Springer Nature
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
 Acknowledgements

Many people offered advices and encouragement for this research

project. First of all, we would like to thank the Finnish Institute of
International Affairs that allowed us to present a first draft of this project
in October 2015, and in particular Elina Sinkonnen for inviting us at the
China Research Days workshop. In February 2016 we presented a sec-
ond draft, related to the chapters on the theoretical framework and the
AIIB at the China Centre, Oxford University. We are particularly in debt
to Rosemary Foot for helping us to organize and hosting the seminar
and offering important suggestions on the research.
Furthermore, we wish to thank Shaun Breslin, for offering relevant
comments in the early stage of this research and Mark Beeson and Mario
Telò, whose comments at the ISA 2016 convention in Hong Kong were
particularly useful to structure our chapter in the manuscript on the
Regional Comprehensive Economic Partnership.
Matteo Dian gratefully acknowledges Korea Foundation for the funding
provided under the Next Generation Policy Experts programme.

v
 Contents

1 China in Regional and Global Governance

and “Order Transition” in Asia 1
Order Transitions and Primary Institutions.
A Theoretical Framework 1
Regional Orders and Primary Institutions 4
Types of International Order 5
Regional Orders and the Global Order 7
Great Power Management 10
Geography and Spatial Definition of the Region 13
Sovereignty 15
State Capitalism, Contesting the Market as a Primary
Institution 17
Bibliography 21

2 The Origin of China’s Ideational Narratives 25

Introduction 25
Post-colonial Nationalism and Neo-Confucianism 28
A Dream for China 33
A New Type of International Relations 35
A New Model of Global Governance 39
Conclusion 41
Bibliography 43

vii
viii    Contents

3 The Asian Infrastructure Investment Bank 47

Introduction 47
AIIB: The Regional Order and Global Governance 50
The Chinese Narrative: AIIB as a New Type
of International Financial Institution 53
AIIB: Structures and Operating Rules 55
Projects 58
AIIB Amid (Chinese) Sovereignty and State Capitalism 61
Conclusion 63
Bibliography 64

4 Belt and Road, State Capitalism and China’s Economic

Interests 67
The Chinese Narrative and the BRI 67
Belt and Road, State Capitalism and China’s
Economic Interests 70
Belt and Road, Geopolitics and the Regional Order 79
A Few Bumps Ahead for the Belt and Road 81
Conclusion 86
Bibliography 90

5 The Regional Comprehensive Economic Partnership

(RCEP) 95
The Origin and the Changing Purpose of the RCEP 95
Economic Integration and the Chinese Narrative 98
The Content of the Regional Comprehensive Economic
Partnership (RCEP) 101
SOEs, Market and State Capitalism 108
Conclusion 111
Bibliography 113

6 Conclusion 119
Bibliography 131

Index 133
 CHAPTER 1

China in Regional and Global Governance

and “Order Transition” in Asia

Abstract This chapter will propose a theoretical framework aimed at

analysing the evolving role of the People’s Republic of China in the pro-
cesses of regionalization in Asia drawn from the English School approach
to international relations. The rise of a new power in a region entails a
process of contestation, adaptation and renegotiation of the main pri-
mary institutions of an international (or regional) order. In this case this
chapter would consider several of the key primary institution that are
subject to a process of renegotiation due to the rise of China in Asia:
Great power management; Territoriality as a geographical or spatial defi-
nition of the region; Sovereignty; Market.

Keywords China · Regionalism · East Asia · English School

International order · Primary institutions

Order Transitions and Primary Institutions.

A Theoretical Framework
China’s recent regional initiatives represent a fundamental lens through
which we can analyze and understand Beijing’s rapidly evolving role in
the regional and global order.
Thirty years ago, Deng Xiaoping theorized the need to avoid any
leadership role in Asia, in order to concentrate on domestic reforms and
modernization (Vogel 2011). Since the rise to power of Xi Jinping and

© The Author(s) 2018 1

M. Dian and S. Menegazzi, New Regional Initiatives in China’s
Foreign Policy, https://doi.org/10.1007/978-3-319-75505-2_1
2 M. Dian and S. Menegazzi

the Fifth Generation of Leaders, China has proposed a comprehensive

blueprint aimed at transforming regional governance in Asia.1 The objec-
tive of reforming and integrating the current regional and global eco-
nomic order led to the promotion of the three most relevant initiatives of
the Xi era: the Belt and Road initiative (BRI); the Asia Infrastructure and
Investment Bank (AIIB) and the Regional Comprehensive Economic
Partnership (RCEP). This plan has the potential to trigger a substantial
evolution for the contemporary economic order, regionally and globally,
and to redefine the Chinese role in Asia and beyond.
This book aims to analyse the origins, content and possible con-
sequences of China’s regional blueprint, and the three flagship initia-
tives associated with it. The book will employ a theoretical framework
drawn from the English School or International Society approach to
international relations, especially from recent theoretical developments
that incorporate issues such as power shifts and order transitions, when
considering the Asian context. This framework has several advantages.
Firstly, it eschews the two main Manichaean narratives that have char-
acterized mainstream International Relations (IR) theories relating to
the rise of China: the realist narrative, which predicts a future of security
competition between China and the other key Asian states, and the lib-
eral integrationist narrative, which underlines the capacity of the global
order to socialize and include a new great power through economic and
social means.
Realists and power transition theorists have emphasized how Beijing’s
ascendency, as with the rise of other great powers in the past, is likely­
to generate instability and security competition, and even trigger a
hegemonic war (Friedberg 1993; Mearsheimer 2010). Structural real­
ists tend to consider contemporary China as a potential hegemon for
East Asia. As a result, according to these interpretations, a rising China
will, whether or not it means to do so, destabilize the present regional
order, create instability, and threaten its neighbours (Kirshner 2010).
From this perspective, China and the United States (US), are likely to fall
into the Thucydides’ trap (Allison 2017): as the Ancient Greek historian
stated about the conflict between Athens and Sparta, it was “the rise of
Athens and the fear that this inspired in Sparta that made war inevitable”

1 Xi Jinping and Li Keqiang are considered to be part of the Fifth Generation of Leaders

in the Peoples’ Republic. The first generation was identified with Mao Zedong, the second
with Deng Xiaoping, the third with Jiang Zemin, and the fourth with Hu Jintao.
 1 CHINA IN REGIONAL AND GLOBAL GOVERNANCE … 3

(Gilpin 1984, p. 289). Similarly, Beijing’s ascent would create a competi-

tion for security and primacy between Beijing, as a new rising power, and
the US.
Analyses inspired by constructivist and liberal theories have gener-
ally provided less pessimistic predictions. They have indicated how sev-
eral factors, from economic interdependence to institutionalization
of the contemporary order, are likely to prevent a hegemonic conflict.
Liberal theorists, such as John Ikenberry, have highlighted how China has
been growing within the system, and has realized that it is much easier
to join the current liberal international order rather than trying to sub-
vert it (Ikenberry 2008). Other liberal analyses have illustrated how the
important level of economic, commercial and financial integration have
prevented the US and China from engaging in a great power competi-
tion. Others have located the possibility of a peaceful rise to the broader
framework of a capitalist peace (Weede 2010).
Constructivist analyses have underlined how Beijing has been social-
ized by its participation in the vast array of international institutions and
regimes that underpin the current order (Johnston 2008). Other analy-
ses, inspired both by the constructivist and the liberal perspective, have
argued that the Chinese rise represents a factor of stability and peace
for the region. David Kang highlighted how the Beijing ascendency was
above all a return to normality for the region (Kang 2008). Other Asian
states, according to Kang, are likely to consider it both as an opportunity
for trade and economic development and a return to a natural situation,
after a long interlude, which began with the demise of the empire and
culminated in the prolonged period of self-isolation following the Maoist
revolution (Kang 2010).
The English School of International Relations has provided sev-
eral interesting theoretical insights on the rise of China that overcome
the Manichaean contraposition between the realist and liberal perspec-
tives. The English School considers the rise of a new great power, such
as China, as the origin of both a power shift (namely, a redistribution
of material capabilities) and a process of order transition—a process of
renegotiation of the patterns of hierarchy in the regional order, and
the normative content of the order itself. The rise of a new power in a
region entails a process of contestation, adaptation and renegotiation of
the normative roots of an international (or regional) society (Goh 2013;
Buzan and Zhang 2014a).
4 M. Dian and S. Menegazzi

In contrast with early constructivist accounts, China is not simply the

subject of a process of socialization through which it absorbs rules and
norms of the international order. It can also promote its own norms and
its own ideas concerning key institutions of the international society. This
dialectic between assimilation and contestation represents a fundamental
theoretical and analytical insight, since it helps to avoid an over-simplistic
and dichotomist choice between postulating the logical necessity of the
Thucydides trap and theorizing a unidirectional and unproblematic pro-
cess of socialization and homogenization (Zhang 2011; Buzan 2010).
This approach, focusing on the dynamic between socialization, contes-
tation and resistance, is capable of describing and theorizing a funda-
mental effect of the Chinese ascendency and of the contemporary order
transition: the process of influence and socialization has been mutual.
China has been socialized according to the norms and institutions of the
Western-led international order. However, China is demonstrating itself
as increasingly capable of shaping the normative and institutional foun-
dations of the order, regionally and globally.

Regional Orders and Primary Institutions

The crucial and perhaps most distinctive concept of the English School
approach is that of primary institutions. In our analysis, primary institu-
tions are central to an understanding how and to what extent China’s
regional initiatives are leading to a process of renegotiation of the cur-
rent regional order in Asia.
The English School literature has indicated several key features of pri-
mary institutions. As stated by Hedley Bull, in his classic account: “By
an institution we do not necessarily imply an organisation or administra-
tive machinery, but rather a set of habits and practices shaped towards
the realisation of common goals.” (Bull 1977, p. 74). Barry Buzan later
specified the concept further, defining the fundamental properties of pri-
mary institutions as “durable and recognised patterns of shared practices
rooted in values held commonly by the members of interstate societies,
and embodying a mix of norms, rules and principles” (Buzan 2004,
p. 181). Importantly, these norms, rules and practices should be shared
and considered as legitimate by members of the international society.
Primary institutions constitute the fundamental normative pillar of an
international order. As a result, they represent a crucial constraint to
asymmetry of economic, political and military power.
 1 CHINA IN REGIONAL AND GLOBAL GOVERNANCE … 5

Primary institutions, moreover, “play a constitutive role in relation

to both the pieces/players and the rules of the game” (ibid.). They are
durable but not permanent. They rise, they evolve, and they can decline.
While primary institutions such as dynasticism and colonialism disap-
peared during the last century, norms, values and practices related to
equality of people, such as self-determination and human rights, have
risen and evolved, determining a fundamental change in contemporary
international politics.
The original list of primary institutions proposed by Hedley Bull
included diplomacy, war, balance of power, great power management,
and international law. Contemporary literature broadly agrees to con-
sider as fundamental primary institutions sovereignty, territoriality, diplo-
macy, great power management, equality of people, market, nationalism,
and environmental stewardship.

Types of International Order

The English School literature generally identifies two ideal types of inter-
national order: pluralist and solidarist (Buzan 2014). Pluralist orders are
defined by the prevalence of the role and the rights of states. Moreover,
they are characterized by a normative orientation that gives priority to
the necessity of order over the research of justice. An ideal-typical plural-
ist order is rooted in the respect of sovereignty and non-interference; it
assigns a prominent role to great powers as keepers of the international sta-
bility; international law primarily delimits the interactions between states.
The ideal type of pluralist order is very close to a Westphalian international
system, in which states are sovereign in their own territory, and do not
seek to interference in the domestic politics of other states.
As suggested by Hurrell, in a pluralist order, while states recognize
the presence of common as well as diverging interests, they realize
that cooperation is hard to achieve. Therefore, cooperation is limited
to the management of problems that endanger their coexistence, such
as nuclear proliferation, and conflict limitation (Hurrell 2007). Finally,
and importantly for our analysis, a pluralist order is, by definition,
open to ideological differences, especially as every state has the right to
self-determination.
By contrast, solidarist orders are defined by the priority assigned to
the protection of the rights of individuals and the promotion of justice,
beyond the limits of the sovereignty of a state and non-interference in
6 M. Dian and S. Menegazzi

the affairs of other states. Moreover, solidarist orders are defined by

“high, or wide, degree of shared norms, rules and institutions among
states” (Buzan 2004, p. 49). In a solidarist order, the international com-
munity, states and especially great powers, have a duty to advance and
protect the rights of individuals beyond the limits of a state’s sovereignty
(Linklater 1998). In a solidarist order, human rights and individual integ-
rity should also be upheld through the practice of humanitarian inter-
ventions, and the application of the doctrine of Responsibility to Protect
(R2P). International law and global governance should transcend the lim-
its of state’s sovereignty. Multilateralism is considered a more legitimate
and viable instrument for international policymaking than bilateralism.
International institutions have the right and the duty to intervene, directly
regulating issues related to the economic, social and political sphere.
Even if the English School literature does not generally emphasize this
issue, here it is important to include free trade and the globalization of
capitalism among the crucial elements of a contemporary solidarist order.
In an ideal-typical free market, individuals, as with economic agents, are
free to produce, trade, invest and purchase despite and beyond national
boundaries. As a consequence, international law and global governance
should protect their rights to do so globally, limiting obstacles put in
place by states to hinder free economic activities, or to make production,
trade or finance an instrument functional to the national interest.
This distinction between the solidarist and the pluralist ideal type is
crucial for analyzing the role of China in the contemporary regional and
global order, as well for understanding the normative orientation that
has been influencing China’s regional initiatives. As this book will argue,
Beijing’s attempts to contest and reshape the international order can
often be understood as an effort to resist the development of solidarist
elements in the contemporary international order, while reaffirming the
pluralist and “Westphalian” elements.
The book will explore how China’s identity and foreign policy prac-
tices have been, and remain, intertwined with a substantially plural-
ist vision of international politics and a resistance to the majority of
the attempts of solidarist elements being injected into the international
order. In Chapter 2, we will describe the origins of the main ideas that
have underpinned China’s recent regional initiatives. Concepts such as
the new type of great power relations, win-win relations, and, to a cer-
tain extent, the “Chinese Dream”, are strongly associated with a plural-
ist, if not a Westphalian, orientation.
 1 CHINA IN REGIONAL AND GLOBAL GOVERNANCE … 7

Regional Orders and the Global Order

Another relevant theoretical issue for our analysis is the relationship
between regions, regional orders and global order (Stivachtis 2015).
From an English School perspective, regions cannot be considered “nat-
ural”, or a by-product of geographical proximity. Regional orders entail
different elements: some level of regionalization, defined by the existence
of a degree of societal integration and networks of economic, political
and societal exchanges; the presence of interstate political cooperation
that generally corresponds with the existence of international or sovra-
national institutions; finally, a degree of regional identity or regional
awareness. In other terms, regions are socially and politically constructed
by agents, who act to construct a sense of belonging or identification.
The first generation of English School scholarship explained the his-
torical existence of the regional orders and regions by the fact that the
expansion of European and Western international society was uneven. As
a result, different regions absorbed, via socialization or imposition, the
fundamental primary institutions of the international society at different
times and in different degrees. These accounts underline how decolo-
nization represented the ultimate manifestation of the expansion of the
European international society (Bull and Watson 1984; Watson 1992).
More recent accounts have criticized the Eurocentric bias of these
earlier ones, highlighting the role of non-Western agents in absorbing,
promoting, localizing or resisting key primary institutions that originated
in the West (Hobson 2012). The theoretical point made by this second
wave of scholarship is crucial for our analysis. The “expansion perspec-
tive” considers the return of China to international society after 1978
as a one-sided and uneven process of socialization to the normative core
of the Western-led global international order. However, our analysis will
underline how China has not only grown capable of resisting undesired
evolutions pointing towards a solidarist order, but has also been develop-
ing the capacity to promote its own vision of the regional order, rooted
in its own principles and its own narrative.
The relationship between the global order and its normative foun-
dations and the regional order and local primary institutions is central
to our analysis. From an English School perspective, the relationship
between regions and the global international society revolves around
four main elements: (1) regions are containers for normative diversity
and difference; (2) regions are poles built around power asymmetries;
8 M. Dian and S. Menegazzi

(3) regions entail levels in a system of multilevel global governance; and

(4) regions are harbingers of change in the character of international
society (Hurrell 2007, p. 239).
The first point touches upon the fundamental role of primary institu-
tions. As Buzan and Zhang have stated, the key to identifying the exist-
ence of a regional order is in identifying the level of differentiation from
the global order and its Western normative core, the degree of differen-
tiation from the neighbouring regional order, and its placement on the
pluralist–solidarist spectrum (Buzan and Zhang 2014b).
Consequently, regional orders can manifest primary institutions that
are not present at global level, they can lack primary institutions pre-
sent at global level, or they can interpret them differently, displaying
significantly different practices associated with them. This differentia-
tion, which generally manifests itself through processes of resistance and
contestation, is probably the most common, as well as the most relevant
(Costa-Buranelli 2015).
The European Union (EU) is an example of differentiation in a soli-
darist sense. It has promoted an attempt to overcome the fundamental
pluralist and Westphalian elements of international society, through the
abolition of internal borders, the development of a multi-layered citizen-
ship (national and European), and transcendence of national sovereignty
and non-interference (Stivachtis and Webber 2015). Conversely, the East
Asian regional order has moved in the opposite direction, with China as
well as the Association of Southeast Asian Nations (ASEAN) members
working towards the reinforcement of sovereignty and non-interference
as a fundamental normative pillar for the region.
The existence of a regional order involved the translation of a hier-
archy of power into a working local order. This in turn necessitates two
elements: the translation of asymmetric power into legitimate authority,
and the achievement of solution to common problems both in the realm
of security and economic cooperation. Finally, a regional order tends to
generate a regional level of governance and regional institutions. These
institutions can be inspired by what Acharya has defined as local norma-
tive prior, namely reflecting local norms and values, or reflecting a nego-
tiated compromise between local and global norms (Acharya 2011). For
instance, cooperation within ASEAN tends to reflect the respect of sov-
ereignty generally associated with an “Asian” and post-colonial collective
prior. However, economic cooperation in the realm of ASEAN+3 could
be considered as a compromise between global and local norms in terms
of monetary and financial regulations.
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