China's Xi calls for 'bridges' amid trade, diplomatic frictions

By Joe Cash

BEIJING (Reuters) -Chinese President Xi Jinping called on Friday for the building of "bridges" in the global economy, as Beijing grapples with economic, trade and territorial disputes with neighbours and trading partners.

The world's second-largest economy will never leave the road of peaceful development, Xi told a conference to commemorate China's guiding principles for foreign affairs, first formulated 70 years ago.

It will also not become a "strong" state seeking to dominate others, Xi told an audience that included Myanmar's former president, Thein Sein, and Nong Duc Manh, the former general secretary of the Vietnamese Communist Party.

"Facing the history of peace or war, prosperity or unity or confrontation, more than ever before, we need to carry forward the spirit and connotation of the Five Principles of Peaceful Coexistence," Xi said.

These first figured in a 1954 pact struck with regional rival India over their Himalayan border. Even so, Indian officials were absent from the front row of the audience reserved for guests of honour.

Since the 1950s, China's ruling Communist Party has gone from not being recognised by the United Nations to boasting the biggest diplomatic footprint in the world and presiding over an $18.6-trillion economy.

Beijing now signals a desire for other countries to see it as a diplomatic heavyweight, even as other nations accuse it of economic coercion and unfair competition.

After China brokered an unexpected detente between Iran and Saudi Arabia last year, China's top diplomat, Wang Yi said the country would continue to play a constructive role in handling global hotspot issues.

But Beijing's unwillingness to condemn Russia's invasion of Ukraine and its pursuit of a "no-limits partnership" with Moscow present hurdles to that ambition. They saw China skip a summit on a peace conference in Switzerland this month.

China's trade ties with the European Union have also come under strain as the bloc of 27 nations plans to impose additional tariffs on Chinese-made electric vehicles, potentially opening up a new front in the West's tariff war with Beijing begun with Washington's initial import duties in 2018.

The EU accuses China of flooding its market with cheap EVs produced by Chinese automakers that have benefited from heavy state subsidies.

"In the era of economic globalisation, what we need is not to create chasms of division, but to build bridges of communication, and not raise the iron curtain of confrontation but to pave the way of cooperation," Xi said.

'DANGEROUS PERIOD'

China has struck a softer tone in some recent dealings with the world, freeing an Australian journalist from prison and steadying ties with Canberra, resuming informal nuclear talks with the U.S., and agreeing to debt restructuring deals with debtors.

Yet tension runs high with countries nearer home.

Ties with India have been tense since the biggest military confrontation in decades on their disputed Himalayan border in June 2020, which killed 20 Indian and at least four Chinese soldiers.

India has since made it tough for Chinese companies to invest, banned hundreds of popular apps and cut passenger routes, though direct cargo flights still operate between the Asian giants.

Tension with the Philippines has also risen in the South China Sea, where Manila and Beijing have competing claims, leading U.S. officials to remind Beijing their mutual defence treaty obligations with the Philippines are ironclad.

"The best case illustrating the success of the Five Principles is China's relations with the Association for South East Asian Nations, Zhang Weiwei, professor of international relations at Fudan University, said on the summit's sidelines.

The Philippines is a member of the ASEAN bloc.

"Europe has deviated from those principles, (and) as a result, there are conflicts there," he added. "Even in the case of China and the Philippines... China has only resorted to water cannon - not a single gunshot."

But delegates worried over how easily similar further conflicts could take hold across the world.

"At the end of the day, we need a forum where people can talk, regardless of your size, your strength, your economic might, your military might," Siddharth Chatterjee, the UN's resident co-ordinator for China, told Reuters.

"It is about making sure that we have dialogue, be engaged, because right now ... it is a dangerous period that we've entered," he said, speaking just before Xi's speech.

(Reporting by Joe Cash; Writing by Ryan Woo; Editing by Stephen Coates and Clarence Fernandez)