China boosts economic diplomacy

17 january 2013

The Ministry of Foreign Affairs on Tuesday established the Department of International Economic Affairs to serve economic diplomacy, which is increasingly important in China’s diplomatic blueprint.

The move shows that Beijing has recognized its increasing power in the economic field and is moving forward to make better use of it, Chinese experts said.

A rapidly growing number of international business disputes intertwined with political factors forced the Foreign Ministry to set up the new body to protect national economic security, they added.

Foreign Ministry spokesman Hong Lei said at a daily briefing on Tuesday that the new body will assume responsibility for international economic affairs including preparation for, and follow-up actions resulting from, Chinese leaders’ attendance at significant events such as the G20 and APEC summits, and meetings of BRICS countries.

The department is set to work with other Chinese government organs to make arrangements for the country to cooperate in economic and development fields within the United Nations and other international and regional cooperation frameworks, Hong said.

It will also focus on research work on issues such as global economic governance, international economic and financial situation and regional economic cooperation, he added.

Zhang Jun, former Chinese ambassador to the Netherlands, was appointed as the first chief of the newly established department.

Zhang, 52, returned from the Netherlands in July. He previously served as deputy director-general of the ministry’s international department from 2002 to 2004.

Economic topics closely related to politics are increasingly dominating major international forums like the G20, said Zhu Caihua, vice-dean of the School of International Economy under the China Foreign Affairs University.

That is why China needs a specialized organ to study relevant strategies, she said.

“China’s soaring economic strength enables it to provide due assistance to developing countries and the European Union hit by the debt crisis. These moves also give China more say and flexibility in foreign relations,” she said.

Hong said China is willing to strengthen financial cooperation with Europe, when commenting on the inaugural board meeting of the European Stability Mechanism in Luxembourg on Monday.

Earlier this year, Premier Wen Jiabao said China was considering how to get “more deeply involved” in resolving Europe’s debt crisis through the mechanism and European Financial Stability Facility.

Another case where the new department can play an important role is the recent spontaneous boycott by Chinese of Japanese products to protest Tokyo’s so-called purchase of Diaoyu Islands in September.

The Chinese government did not instigate these boycotts, and called for rational patriotism after Japanese-owned businesses were looted and damaged in some Chinese cities.

The new department will also help handle economic disputes with political backgrounds, which cannot be solved solely by the Ministry of Commerce, Zhu said.

On Sept 6, the EU launched an anti-dumping investigation of Chinese solar panels, involving more than $20 billion in Chinese exports, the largest so far. The move constitutes a test of the EU’s commitment to free trade.

In the run-up to the US presidential election in November, both US President Barack Obama and his Republican challenger Mitt Romney frequently blamed China for domestic economic woes.

The latest case is a report by the US House Intelligence Committee accusing two Chinese technology firms — Huawei Technologies and ZTE Corp — of posing a national security threat to the US.

A spokesman for Huawei on Monday refuted the allegation, saying “the report is little more than an exercise in China-bashing and misguided protectionism”.

Foreign Minister Yang Jiechi said at the inaugural ceremony on Tuesday that the new department will help safeguard China’s national development interests and economic security, and contribute to world economic growth.

State Councilor Dai Bingguo, who is in charge of foreign policies, has required the Foreign Ministry to “deeply understand the reality and long-term significance of intensifying economic diplomacy under the new situation”.

Still, experts warned when handling business disputes China should be prudent with economic sanctions, a double-edged sword with an adverse effect.

The Foreign Ministry has expanded its organization based on the development of China’s foreign relations, said Dong Manyuan, deputy director of the China Institute of International Studies.

The ministry set up the Department of Boundary and Ocean Affairs in 2009 and increased its news conferences from twice to five times a week in 2011.