Economic crisis forces China to adjust foreign policy: Ian Bremmer

China is experiencing its worst economic performance in decades, forcing Beijing to take a more cooperative stance in international relations, global risk expert, political scientist and author Ian Bremmer said in a conversation with Rahul Kanwal, News Director, Aajtak & India Today.

The world’s second-largest economy is facing economic challenges. Provincial governments are essentially bankrupt and the real estate sector, which accounts for about 30% of government revenue and 70% of consumer wealth, is in collapse.

Manufacturing remains the only bright spot in China’s economy. However, this power has become a double-edged sword. With weak domestic consumption, factories are overproducing, leading to political backlash from trading partners around the world.

“I was in Beijing a week ago and I will tell you that this is the worst economic performance I have seen from China in decades. Management recognizes this,” said Bremmer, president of Eurasia Group.

This economic pressure is changing China’s foreign policy. Beijing has shown less willingness to engage in confrontational behavior and is actively seeking to reduce tensions with key partners.

“This is a time when the Chinese are well aware that they do not want geopolitical confrontation throughout the world. It led to more interaction, um, it led to less willingness to be assertive and aggressive and react with perceived slights “tit for tat.” This is also absolutely the reason why Xi Jinping decided that now was the time to reach out to India and have very successful bilateral negotiations,” Bremmer said.

This shift was evident during the recent meeting between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi, their first bilateral talks in about five years. While the meeting signals a warming in relations, experts suggest the change may be temporary.

“I don’t think the Chinese have changed their overall long-term strategy,” Bremmer explains. “But in the short term… I think it’s not just a matter of a few months. I think it’s probably several years because China’s problems are structural.”

This economic situation has also affected China’s role in BRICS, an economic bloc made up of Brazil, Russia, India, China and South Africa, which recently expanded to include four new members. The group is increasingly important as a platform for Global South cooperation, although member countries maintain different relationships with Western countries.

Despite discussions about reducing dependence on the US dollar within the BRICS, significant changes in the global financial system seem unlikely in the near future. The dollar’s role in global trade has remained virtually unchanged since the 1990s, even as the relative strength of other currencies has changed.

For the Chinese leadership, the immediate priority appears to be stabilizing the domestic economy rather than pursuing aggressive foreign policy goals. This economic reality is forcing Beijing to take a more pragmatic approach to international relations, at least for the foreseeable future.