China’s New Economic Power is a Weapon in Old Disputes

Mongolia

A month ago, the Dalai Lama, the leader of Tibetan Buddhism, visited Mongolia. Despite years of repressive communist rule, more than half of Mongolians consider themselves Buddhist. The primary sects of Buddhism followed in Mongolia are descendants of Tibetan buddhism, meaning the Dalai Lama has visited numerous times to connect with his followers. This time, however, was different. Why? Because of China.

After the fall of the Qing dynasty at the dawn of the 20th century, Tibet had existed as a de facto independent state. Once the Communist Party consolidated control over all of China, however, it turned its attention towards Tibet. In 1950, it began a campaign to absorb Tibet into the People’s Republic of China, and in 1959 the Dalai Lama fled Tibet for India. Since then, he has continued to advocate for greater Tibetan autonomy. As a result, China has embarked on a campaign to discredit him as a separatist.

The 14th Dalai Lama

It’s no surprise, then, that China wasn’t happy with the Dalai Lama’s visit to Mongolia, but that has never stopped Mongolia from welcoming him before. After this particular visit, however, the government decided to give into China’s demands and announced that the Dalai Lama would never again be welcome in the country. So what changed?

This time, Mongolia can’t afford to anger China. A few years ago, Mongolia’s economy was booming as a result of its rich mineral deposits. But since global commodity prices have nosedived, the country has struggled to repay its debts and has received a credit downgrade. As a result, it is seeking a $4.2 billion dollar loan from China. Furthermore, China accounts for a huge majority of Mongolia’s imports and exports. Leveraging its economic advantage, China closed a major border crossing with Mongolia and froze talks regarding the terms of the loan deal. Ultimately, the Mongolian government decided that its economy was more important than its religion. So the Dalai Lama is no longer welcome in Ulaanbaatar.

São Tomé and Príncipe

The location of São Tomé and Príncipe in Africa

The government of São Tomé and Príncipe, a small island nation off the west coat of Africa, has decided to shutter its embassy in Taipei. Before Wednesday, São Tomé and Príncipe was one of 22 countries that recognized the Republic of China, based in Taiwan, as the legal successor of the Qing Dynasty. Now, that number has dropped to 21. The rest of the world recognizes the People’s Republic of China, based in Beijing, as the successor of the Qing Dynasty.

Although most people believe Taiwan, an island of the east coast of China, is an independent nation, its status is actually quite a bit more complicated. Following the fall of the Qing dynasty, a republic was established in China. The republic, however, was never able to successfully consolidate control over the entire country. First, power was concentrated in the hands of several regional warlords. Then, the Japanese invaded the country. In the meantime, a civil war was being fought between the Republic of China and the Communist Party of China. Eventually, the Communist Party of China began to triumph. As a result, the leaders of the Republic of China fled to Taiwan and established a government there. Since then, they have claimed to be the legal representative of all of China, not just Taiwan.

The Republic of China only controls Taiwan, the purple island on the far right side of this image. But it claims to control all of this.

Thus the government of Taiwan does not lead an independent country; rather, it is a government in exile that claims to represent all of China. Because of this, a country cannot diplomatically recognize both the government of Taiwan and the communist government of China. By recognizing Taiwan, a country is at the same time delegitimizing the People’s Republic of China. So when São Tomé and Príncipe declared that it would sever ties with Taiwan, what it is really doing is switching its allegiance from the Republic of China to the People’s Republic of China.

Doing so is not an uncommon occurrence. In fact, island nations in the Pacific often switch sides depending on which government seems more likely to grant them development aid. So like Mongolia’s recent decision, the reason for São Tomé and Príncipe’s decision is economic.

Over the past few years, China has poured billions of dollars into Africa. It has granted loans, bought land, and built infrastructure. From Nigeria to Ethiopia to Kenya, it has funded massive projects across the continent. São Tomé and Príncipe has benefitted little from China’s massive injection of capital, probably because of its recognition of the Republic of China. So in shifting its diplomatic ties, it is likely attempting to gain a piece of the People’s Republic’s bountiful pie.

Old Beefs, New Bounties

For decades, the People’s Republic of China has been one of the world’s fastest growing economies. Now, it is second behind the United States. When the leaders of the Republic of China crossed the straight to Beijing, China was an agrarian society steeped in crushing poverty. When the Dalai Lama left Tibet, it had yet to develop into a great power. It had nuclear weapons and massive population, but for years its poverty held it back. But times have changed. Now that China has made progress in development, it has become a powerhouse. Smaller nations like Mongolia and São Tomé and Príncipe can no longer afford to stand up to an economic empire. Beijing is fully aware of its newfound power, and it’s using it gain an upper hand in old disputes.

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