China's priorities

Beijing should focus on economy, not military assertion

Deng Xiaoping, the architect of China's economic reforms, is commonly supposed to have used the motto "hide your strength, bide your time, never take the lead" to guide China's foreign policy. In the past year or so, under Xi Jinping's assertive leadership, this maxim of military minimalism has been jettisoned. China has bullied the Philippines and Vietnam in the South China Sea by setting up "land reclamation projects" that are being built with a speed that is unusual even by China's standards. The widespread expectation is that they will be used in time as military bases, rather too close for the comfort of these smaller nations. Last week, China also sent five navy ships all the way to Alaska, a clear message to the US.

Last week's massive military parade right in the heart of Beijing could be seen as a coming-out party for President Xi's more muscular foreign policy. The event was planned well in advance but coincided ironically with the debacle on China's stock markets. Among the many confusing signals last fortnight was the suggestion that the government needed to prop up the stock market to ensure the military parade on the 70th anniversary of the end of World War II had an auspicious backdrop. This may make no sense - but few of Beijing's actions and comments on the stock market do. In the event, some 12,000 troops marched, and new advanced aircraft bombers were displayed along with the chillingly named "carrier-killer missiles" that can strike, if need be, US aircraft carriers far into the Pacific Ocean. What was on show was the cumulative effects of several years of double-digit increases in military spending. So far, so intimidating.

Less impressive was that although leaders from all over the world and the region were invited, almost everyone declined but for President Vladimir Putin and the South Korean president. As happens so often when China tries to project that it is ready to lead the world, it lacked diplomatic finesse when doing so. What was planned as a coming-out party will be remembered more for the no-shows by world leaders. Just months after gullible observers were applauding China's soft power in convincing nearly everyone - save the US - to join the Asian Infrastructure Investment Bank, the detention of securities traders and a respected business journalist for their perceived role in the stock market bubble bursting has made it clear that Beijing would be a poor steward of an international financial organisation. Mr Xi could and should learn from the Deng doctrine: when China's economy was growing by leaps and bounds, the world admired China for its economic prowess. It is time to devote the leadership's energies to stabilising the markets and China's trade. China's foreign reserves declined by $94 billion in the attempt to keep the renminbi from falling too fast. Exports in August declined by about six per cent, while imports plunged by double-digit levels. Organising a military parade might seem easier than turning around those numbers, but the world is paying more attention to China's shaky economy.