Democracies usually get out of a pickle by changing their government and starting afresh. In 2021 the Biden Administration will get to work on reviving America from the extraordinary ravages of COVID, an associated economic downturn and deep social divisions. In contrast, China will continue on under the administration of Xi Jinping, the General Secretary of the Chinese Communist Party (CCP) for the foreseeable future and perhaps well beyond.  

Biden is bringing in a host of new policies starkly different to those of Donald J. Trump, whereas Xi is to a great extent trapped. Xi might attempt some minor course corrections but in general he’s stuck on the path he has set over the last several years. A major change is unthinkable as this would suggest some failing in the CCP leadership team. If for the US it is a time of national renewal, for China it is a time of doubling down.  

Biden will be both hoping for a quiet 2021 on the international front and actively trying to make it so. The Trump administration is handing in a US in its worse state since at least the 1918-19 pandemic. Restoring the US will require much work and there are real doubts it’s possible.

Given this, the initiative in the US/China competition will probably continue to shift away from Washington and towards Beijing. What Beijing does has now become more important than what Washington does, certainly regionally. The first years of the Biden administration are likely to be mainly reactive to the actions of the Xi Jinping administration. Paradoxically, this may not help China.

China will have more room to manoeuvre and use its agency, but the CCP’s actions appear more likely to alienate others rather than attract them to Beijing’s orbit.

Two of Xi’s foreign policy approaches stand out in their ability to damage China’s global standing but also highlight how the Party’s objectives have shifted since Xi came to power.

Firstly, Xi has reversed earlier efforts by China to build soft power and instead embraced deliberately destroying it through wolf warrior diplomacy, ‘weaponising’ state media and general threats. Considerable effort has gone into implementing this remarkably self-destructive policy. It has been particularly effective in damaging China’s standing across developed countries. This is a somewhat curious step as these countries are where China has invested most of its FDI funds.

This is not to say that decision-makers in Beijing may actually believe they are winning global hearts and minds. Over time, authoritarian leaders traditionally tend to create around them a team that tell the ‘leader for life’ what he wants to hear.

In 2021, China can be expected to keep damaging its soft power, with the fallout from the continuing COVID-19 disaster reinforcing the CCP’s efforts. The CCP’s grab-bag of COVID-19 conspiracy theories about where COVID originated would be humorous if they were not so serious for humanity as a whole. This is not just damaging to China’s soft power, but also has grave implications for the world managing the next pandemic.  

Secondly, China’s greatest strategy is its economic power however, under Xi this is being increasingly used to coerce nations. China’s present use of economic coercion against Australia to address a ‘laundry’ list of grievances is not at all unusual. A recent study found that over the past 10 years, there were 152 cases of such coercion affecting 27 countries and the EU, with a very sharp escalation in such tactics since 2018.

Importantly, this economic coercion should not be confused with trade disputes. Some argue that China is as bad as other major powers in observing trade commitments and so Chinese trade actions are acceptable. These issues are separate to the sharply increasing use by the CPP of economic coercion. 

The problem for China is that the global marketplace works on trust. Over time Xi’s escalating use of economic coercion will undermine the market’s confidence in China. If contracts and commercial agreements can be negated overnight by a capricious political decision, then sovereign risk worries will start to weaken China’s economic attractiveness and its greatest strength.

For example, can countries and companies rely on China abiding by free trade agreements it has signed, such as the recent Regional Comprehensive Economic Partnership, or are these now situation-dependent and unreliable?

Wrecking China’s soft power and actively coercing others highlight that the XI administration now privileges other matters instead of prosperity. Since the 1980s, to get rich has been ‘glorious’ with the intent of creating a prosperous socialism. However, today building a wealthy nation has demonstrably become less important as a driver.

The 14 points China demands Australia address well illustrate this. The CCP is purposefully setting out to damage China’s economy simply to get satisfaction over what are pretty trivial issues. Noting the energy shortages the Party’s cutting of Australian coal imports is causing in China, a local power company official remarked: “We don’t expect the government to relax import control just because of the trouble it has caused … Politics come first”.

This shift to politics having priority creates further uncertainties for others. Using astute diplomacy China has created numerous multilateral institutions including the Shanghai Cooperation Organisation, the Forum on China-Africa Cooperation, the Central and Eastern European Countries Plus One Forum, the Community of Latin American and Caribbean States, and the Asian Infrastructure Investment Bank. There must now be doubts developing over the CCP’s long-term commitment to these. China, the anchor tenant, might renege at an instant on the agreements that underpin them in pursuit of new, more nationalistic political goals.

The overall inference is that the Biden administration may achieve much by simply standing back while the CCP digs itself an ever bigger hole. More may be gained by letting the CCP continue its policies of irritating many others and becoming less globally appealing. In 2021, the Biden administration’s greatest ally in bringing the world to America’s side appears likely to be Xi Jinping. In terms of building good international relations, Xi’s activist CPP may not be a successful one.


Peter Layton is a visiting fellow at the Griffith Asia Institute, an associate fellow at the Royal United Services Institute (London) and author of Grand strategy.