22nd Summit of SCO Council of Heads of State in Samarkand
Global China Inc. Tracker.
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Xis global engagements outside "Fortress China" in Q3

No. 3, October 2022

What you need to know

To the surprise of many who expected that he would wait until after cementing his leadership for another term at the mid-October Party Congress before travelling abroad again, Xi Jinping left ‘Fortress China’ for the first time since January 2020. His brief trip to meet Central and South Asian leaders and his “best and bosom friend” Russia’s Vladimir Putin, was centered around the Shanghai Cooperation Organization (SCO) leaders’ summit in Uzbekistan’s historic ‘Silk Road’ city of Samarkand, from September 15-16. Beijing seems intent to use the SCO to build up a bloc of partners that can help China counter its perceived US-led encirclement, and it may even have drawn other members closer to it due to the clear unease some members have shown in response to Putin’s invasion of Ukraine. 

Also central to Xi’s decision to attend the SCO summit in person must have been Beijing’s efforts to diversify China’s oil and gas suppliers. Our ‘Key Player’ in this edition is therefore China National Petroleum Corporation (CNPC), one of Beijing’s most important actors in expanding oil and gas production abroad and building the infrastructure to carry it to China. As Jacob Gunter explains, SCO members, as well as non-SCO members like Turkmenistan and Myanmar, are vital sources of oil and gas for CNPC, while some other regional players are crucial for CNPC’s distribution network of pipelines to get energy to market. CNPC is actively expanding operations in the Middle East, Africa, and South America as well as Central Asia. Meanwhile, it is seeking to decrease its footprint in liberal market economies like the United States, Canada, and Australia as part of Xi’s turn towards a diversification strategy of minimizing risky dependencies. 

Next, Xi is off to Indonesia to join the G20 Summit in mid-November, after the 20th Party Congress at which he is expected to secure a third term in power. The G20 Summit is likely to be contentious after a year of frictions between the United States, Europe and Russia over the latter’s invasion of Ukraine, and between the United States and China over Taiwan. However, as Francesca Ghiretti argues in her ‘Regional Spotlight’, Indonesia’s government will not simply be content for their country to act as a playing field for the great powers. Indonesia is increasingly comfortable shaping its relationships with others, and with the wider Indo-Pacific region. As a large player, Indonesia is better able than some to play China off against other actors like Japan in order to mitigate Beijing’s influence. At the same time, it has resources and options to handle struggling projects within China’s Belt and Road Initiative (BRI) that smaller recipients like Sri Lanka lack. 

Finally, as Xi returns to the global scene, we take a fresh look at China’s new Global Development Initiative (GDI) – an umbrella concept for China’s development assistance programs launched a year ago. Details of the new body were sparse when it was first announced, but Aya Adachi has dug into the small print that has emerged since. As the initiative comes together, it is putting a strong focus on the sort of development that the BRI does not cover: poverty alleviation, food security, and public health. The program leans into China’s strengths as it aims to replicate some of China’s solutions to its own problems, but in other parts of the world. However, there is also considerable alignment with Beijing’s interests, especially as they relate to empowering its own players in green energy and digital transition. In any case, the GDI is shaping up to be an important component in China’s international toolkit - expect it to get more traction as Xi starts to take the GDI to foreign partners in person.