The year 2020 will go down in the history of China as an “extraordinary year”. The passing year started with the onslaught of coronavirus throughout China and eventually it spread to the world. (The virus had started spreading since November 2019.)

The major events that happened in China were the unprecedented rise in the number of the coronavirus pandemic cases, lockdown of provinces, slowing down of the economy, floods in 27 provinces of China, the fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC), signing of first phase US-China trade deal, passing of the “The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region” and aggressive Chinese postures towards the South China Sea, East China Sea, Taiwan Strait and at the Line of Actual Control between India and China.

Prognosis for 2021

The year 2021 is going to be a very critical year for China. It is the first year of the 14th Five-Year Plan stretching from 2021-2025. China is expected to achieve its first centenary goal of “complete moderate prosperous society”/Xiaokang in all respects and start its journey towards the second goal to fully build a modern socialist country. Furthermore, it is the centenary year of the founding of the Communist Party of China (CPC) in July 2021.¹ In the New Year’s speech, Xi Jinping had mentioned: “the Party as a gigantic vessel that navigates China’s stable and long-term development.” He further said: “After building a moderately prosperous society in all respects in 2020, China will embark on a new journey of development in 2021 and strive to achieve socialist modernization by the year 2035, according to the schedule designed by the CPC.”

At the beginning of 2021, there has been a resurgence of coronavirus cases in China. Fresh evidence of locally transmitted cases has been found in Hebei, Sichuan and other provinces of China. According to the Health Commission of China, as on 31 January 2021, there were 22 cases in Heilongjiang, 10 in Jilin and 1 in Hebei. The Chinese authorities have already issued circulars to stay indoors in the Chinese New Year and promulgated new rules for travelling during the holidays with prior permission from their employers.² Besides the rising number of COVID-19 cases, China continues to be discreet about sharing any information about the origin and spread of the virus. Earlier, the World Health Organisation (WHO) team members were denied visas from the Chinese authorities. They reached Wuhan after much trouble wherein the team was put under quarantine for 14 days. However, not much breakthrough is expected after their investigation.

Some of the major internal and external developments that will affect China in 2021 are enumerated.

Internal Developments

In 2020, efforts have been made to bolster Xi Jinping status within the party. Xi Jinping published an article in the Quishi journal to disseminate his thoughts. It stated: “The most essential feature of socialism with Chinese characteristics is the leadership of the Communist Party of China.”³ Six more articles were published reinstating the idea.⁴

Xi Jinping has termed 2021 as a crucial year for the Chinese leadership. A lot of attention will be given to further consolidating his position, crushing dissidents, emphasizing on ideology, tightening control over the military, as it is the run-up year before the 20th Communist Party of China Congress. Much of the groundwork will have to be done this year. At the fifth plenum of the CCP held in October 2020, Xi Jinping has made a lot of effort to enhance his position and increase control over the party.⁵ The two-session, the 13th National People's Congress (NPC) and the fourth annual session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) will take place on 4 and 5 March 2021, respectively. (In 2020, the sessions were held in May and were for a shorter duration due to the COVID-19.)

Economy

According to the latest data released by the National Bureau of Statistics of China, the Chinese economy grew by 2.3 percent in 2020. The annual GDP of China in 2020 was 101.59 trillion Yuan (USD 15.68 trillion). The GDP in the Q4 was 6.5 per cent year-on-year, up from 4.9 per cent in the Q3.⁶

The Central Economic Work Conference held from December 16-18, 2020 set the economic target of the country. It advocated for a strong domestic market, technology innovation, opening-up and green development as the major tasks. In May 2020, in an endeavour to put the economy back on track, China initiated a new paradigm of “Dual Circulation” and promote reform and opening-up at a higher starting point.⁷ The concept has two equally strong components: "internal circulation," which refers to domestic economic activities, and "external circulation," which relates to China's economic links with the outside world. It indicates that China wants to decrease the role of international trade in its economy, and strengthen its domestic economy.⁸ There are many factors such as the COVID-19, US-China trade war and rising protectionism that are responsible for the enunciation of the concept. Overall, the catchphrase for 2021 for the Chinese economy will be strong recovery, green growth, innovation-driven, resumption and upgrade and commitments to opening up.⁹ The International Monetary Fund has projected the Chinese economy to expand by 8.1 percent.¹⁰ While Nomura has projected a 9 percent GDP growth rate for China.¹¹

Chinese Foreign policy in 2021

In 2020, Chinese Foreign Policy was characterized by mask diplomacy, cloud diplomacy and Wolf Warrior Diplomacy. (The Wolf warrior diplomacy refers to a new approach followed by the Chinese diplomats to be more aggressive in defending China.) Amid the COVID-19, China tried to project itself as the leader and forerunner of the health issues and used the opportunity to propagate the Health Silk Road. Xi Jinping in his conversation with the Italian Prime Minister Giuseppe Conte promulgated the Health Silk Road. He reiterated Chinese commitment to increase anti-coronavirus cooperation with the World.¹²

China's diplomatic relations with major foreign countries and regions in 2021 will be "positive but still challenging". The focus of Chinese foreign policy will be the US, EU, Russia, ASEAN and Africa along with the “Vaccine Diplomacy”.

US-China

On February 14, 2020, the first phase of agreement between the US and China came into effect. As per the agreement, China agreed to purchase more of certain US goods and services worth USD 200 billion in 2020 and 2021 with the base year as 2017. The total US export data and Chinese import data of additional trade, in 2020 are USD 12.5 billion in agriculture, USD 32.9 billion in manufactured goods and USD 18.5 billion in energy. ¹³ The agreements reached in the first-phase deal are going to continue in 2021.

The leadership of China believes that the US-China relations have reached a “new crossroads” and “a new window of hope” is opening with the coming of Joe Biden. The three Chinese telecom giants have already been delisted on the New York Stock Exchange in the starting of the year. The US-China relations can be assessed from the short term and the long term perspective. If Joe Biden prefers talks over confrontation, then the Chinese will try to impose their point of view. From a long-term perspective, the Chinese leadership will follow a wait and watch policy at least for a year. China is likely to send a delegation to the US on early date now that Joe Biden is in the office. The US-China relations are expected to be quite bumpy, at least in the initial phase. Many such statements are coming out from the Joe Biden administration indicating that the bilateral relationship may not be quite hunky dory.

China-EU

In 2020, China-EU marked the 45th anniversary of the relationship. Both countries have signed an investment trade deal, “Comprehensive Agreement on Investment” that will give greater access to each other’s market. The relationship is going to expand in various fields, including mutual assistance in the fight against COVID-19, improvement of the supply chain cooperation in environmental protection and digitalization, and inviting third parties into multilateral cooperation, such as China-Europe Africa projects.

China-Russia

China’s relations with Russia will be important this year. In 2020, China-Russia’s relations have stood the test of time and reached a historic high in all respects. Wang Yi said: “The year 2021 is a year of special importance for China-Russia relation, as both countries will enter a new development stage. In developing China Russia strategic cooperation, we see no limit, no forbidden zone and no ceiling to how far this cooperation can go.” Notably, 2021 will mark the 20th anniversary of the signing of the “China-Russia Treaty of Good-Neighbourliness and Friendly Cooperation”. However, the US factor will continue to play a role in the China-Russia cooperation in the field of military and security.

China-ASEAN

China and ASEAN will celebrate the 30th anniversary of their relations in 2021. As a part of his Vaccine Diplomacy, Wang Yi visited Myanmar, Indonesia, Brunei and the Philippines. Wang Yi chose to visit the countries, just before the new government came to power in the US. The trip was aimed at deepening ties with the countries of Southeast Asia at the beginning of the year so that it remains on a positive note throughout. During his visit, Wang Yi laid the ground for the success of the bilateral relations.

China-Africa

China and Africa will conduct China-Africa Cooperation meetings in Senegal this year. They will work together on the three priority areas of vaccine cooperation, economic recovery and transformative development to build a new consensus on solidarity, break new ground for cooperation, and deliver new benefits to the people. ¹⁴ The fact that Wang Yi made his first foreign trip exemplifies the importance China will attach to the continent in the coming year. Several agreements were signed that further deepened the bilateral relations, enhanced mutual trust, promoted cooperation and accumulated consensus.¹⁵

China and South Asia

China will continue its inroads in the South Asian region. The third multilateral dialogue with Pakistan, Nepal, Afghanistan, Sri Lanka and Bangladesh took place on January 6, 2021. The agenda of the meeting was dealing with COVID-19 and coordinating their economic agendas. Also, the Indian Ocean Region may see greater Chinese activity, as it seeks to boost its trading interests in the ports of Greece, Djibouti and Pakistan.¹⁶

Amid COVID-19 the Belt and Road Initiative (BRI) projects have been either adversely or partially affected. The Ministry of Foreign Affairs of China said that around 20 per cent of OBOR has been "seriously affected" due to the coronavirus pandemic.¹⁷ Around “40 per cent of projects have seen a little adverse impact, and another 30-40 per cent have been somewhat affected”. Cumulatively, 60 per cent are affected and 40 per cent has seen progress.¹⁸ A High-level Video Conference on Belt and Road International Cooperation was held on 18 June 2020 with the participation of 25 countries. The COVID-19 has halted some of the projects. Although the projects have slowed down, the snag should be viewed as a short-term upheaval. The BRI projects will continue with some alteration.

In 2021, China will be active in the multilateral fora. China has released a white paper on “China’s International Development Cooperation in the New Era”. The paper expounds that China will be active in bilateral and multilateral dialogues and expand cooperation in international development to safeguard the international system. In his Davos speech, Xi Jinping said: “multilateralism is about having international affairs addressed through consultation and future of the world decided by everyone working together.”

Besides these engagements, China will organize three major games in 2021; World University Games, Beijing Winter Olympics and the Asian Games.

Conclusion

The Wolf Warrior diplomacy practiced by China has created more foes than friends for China. China has entered 2021 with frosty relations with countries like India, Indonesia, Malaysia and Japan by its aggressive postures in the East China Sea and South China Sea and the Line of Actual Control. Chinese aggression in these regions is already undermining important rules of the established regional system. The strained relations will continue but the major challenge for China will come from the new administration in the US. The deteriorating human rights situation in Xinjiang has already created international pressure on China.

Overall, it is going to be an important year for China as it moves forward to achieve Xiaokang and its ambitious target of becoming a “fully developed, rich and powerful” nation by 2049 (100th anniversary of China). Xi Jinping’s has reiterated: “The road ahead is long, and striving is the only way forward". The year 2021, will not be normal and the challenges for China will be numerous.

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