People’s Republic of China, a rising global economic power has a unique way of developing policies in its style calling it “Chinese-Style” or “China’s wisdom”. The relationship of a state’s economy with its diplomatic ties is known as “Economic diplomacy”. States employ economic policies to achieve their foreign policy objectives.

It is an umbrella term that includes trade agreements at the global and regional level, economic pacts, bilateral and multi-lateral investment projects.

At the broader level, economic diplomacy is divided into two major groups: developmental aid (Investment) and Economic sanctions. For example, the US along with other signatory states has imposed economic sanctions on many countries including Iran, Syria, Russia, and Cuba (Masters 2019). Similarly, states provide financial and developmental aid to developing countries to strengthen their diplomatic ties.

The leaders of the PRC have often emphasized the concept of creating a “harmonious society” at the domestic and international levels. Similarly other ideas like “rejuvenation of the Chinese nation”, and “China’s dream of global development” are often used by Beijing’s top leadership (Embassy of the People’s Republic of China in the Lao People’s Democratic Republic 2011). Beijing has employed the instrument of Economic diplomacy to create a “harmonious society” focused on mutual benefits, peaceful coexistence, and cooperation.

Beijing has a unique approach to defining things according to their norms and values. PRC first redesigned its domestic economy through various reforms after the death of revolutionary leader Mao Zedong in 1976. President Deng Xiaoping introduced reforms for a sustainable economy. His successors also remain stuck to this goal and Beijing’s economy has gone through a major transition from an Import Substitute Industry (ISI) to Export Oriented Industry (EOI).

2013 President Xi Jinping launched a well-conceived mega-investment project called One Belt One Road, later known as the Belt and Road Initiative (BRI). BRI is the revival of ancient China’s Silk Route. It has two dimensions: the Belt means an Economic Corridor on land while the Road denotes a Maritime Silk Road. It is an infrastructure development project aimed at forming a web of connectivity through railways, roads, telecommunications, ports, and energy pipelines, facilitating a network for three densely populated continents of the globe; Asia, Europe, and Africa.

Latin America has also become a part of BRI in recent years. According to the recent reports of 2023, 154 countries of the globe are part of BRI. BRI has five key components: strengthening regional political cooperation, free and unhindered trade, financial integration, infrastructure development, and people-to-people exchange. The initiative defines China’s commitment to its principles of openness and cooperation, harmony and inclusiveness, market operations, and above all a ‘win-win situation’ for all countries of the globe towards a “common good” for mankind (Issued by the National Development and Reform Commission 2015).

The six international Economic corridors include The New Eurasia Land Bridge Economic Corridor, The China-Mongolia-Russia Economic Corridor, the China-Central Asia-West Asia Economic Corridor, the China-Indochina Peninsula Economic Corridor, the China-Pakistan Economic Corridor, and Bangladesh-China-India-Myanmar Economic Corridor.  The Maritime Silk Road covers the South China Sea, the South Pacific, and the Indian Ocean, connecting Southeast Asia, Oceania, and North Africa (Hong Kong Trade Development Council’s Belt and Road Initiative 2018).

To provide financial assistance to this mega project, Beijing laid the foundation of two important global financial institutions: the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB).

NDB, headquartered in Shanghai, was founded by Brazil, Russia, India, China, and South Africa (BRICS) in 2014 to finance and mobilize resources for sustainable development projects in emerging markets of developing nations.

NDB has identified key areas of interest such as clean energy, transport infrastructure, digital infrastructure, management of water resources (sanitation and irrigation), sustainable urban development, and economic cooperation among member states. Being the largest donor of NDB, China has contributed about $100 Billion (Yin 2014).

NDB is strictly committed to Beijing’s goal of prosperity and south-south cooperation. While addressing the Third Belt and Road Forum for International Cooperation held on October 18, 2023, the President of NDB Mrs. Dilma Rousseff praised Chinese values and commitment to global peace and harmony by quoting the famous proverb: “The Ocean is vast because it accepts all rivers”.

China and 57(37 Regional and 20 non-regional) other countries launched AIIB in 2016, with headquarters in Beijing. Its mission is to enhance “social and economic outcomes in Asia.” That would be achieved by investing in sustainable infrastructure projects, connecting people, services, and markets, which ultimately impact the lives of billions; building a better future for them.

According to recent reports, AIIB has 109 member countries, representing 81% of the global population and 65% of the world’s gross domestic product (GDP). In 2020, the Board approved a Corporate Strategy reviving its pledge to development. The five pillars of Corporate strategy include: establishing a market position, achieving impact at a higher scale, adding value along the project cycle, serving a broad range of clients, and building the corporate culture.

These pillars reflect Beijing’s core vision of economic sustainability and comprehensive banking accompanied by robust multilateral governance.

PRC’s persistence in creating a harmonious society is reflected through its economic diplomacy. Its policies have created a favorable environment where countries can interact at bi-lateral and multi-lateral levels for cooperation in different domains including economy, technology, industry, infrastructure development, etc.  Beijing is an active member of many multilateral formal and informal groups like SC0, G20, G77 plus China, BRICS, and FOCAC (Forum on China-Africa Cooperation) which shows the success of its diplomacy.

These multilateral groups are aimed at fostering economic and diplomatic engagements among member states. China’s role as a mediator in the Saudi-Iran Rapprochement is another example of Beijing’s concern for promoting regional stability and prosperity. PRC is the biggest trading partner of both Iran and Saudi Arabia. Beijing is importing 40% of its oil from the Middle East. Middle East is receiving huge trade and investment opportunities under BRI, while China has also shown its willingness to share expertise in fields like telecommunications, AI, and other high-tech areas. In the first 10 years (2013-2023) of BRI, the PRC invested a huge amount of $1 trillion in different projects related to this initiative.

It clearly defines how Beijing is making huge investments in more than 154 countries following its commitment to prosperity and development in every part of the globe. During official visits for top-level summits, Chinese leaders are accompanied by a large entourage of government officials and the business community. The purpose of this activity is to facilitate interaction with the business class of the host countries on the sidelines of summits and meetings to avail themselves of the options of partnerships and investments immediately.

Beijing has effectively employed the instrument of economic diplomacy by launching the One Belt, One Road initiative (BRI).

This initiative has not only opened ways to new and untapped markets of the developing world but also helped Beijing in fostering its diplomatic relations with these countries. PRC is a member of many multi-lateral formal and informal groups but the chief areas of all the partnerships are economic cooperation and diplomatic relations. Beijing has strong diplomatic ties with its immediate neighboring countries and countries in Asia, Africa, Latin America, and Europe.