Economic crisis forcing China to adjust foreign policy: Ian Bremmer

China is facing its worst economic performance in decades, pushing Beijing to adopt a more cooperative stance in international relations, global risk expert, political scientist and author Ian Bremmer said while speaking to Rahul Kanwal, News Director – Aajtak & India Today.
The world’s second-largest economy is grappling with 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 strength has become a double-edged sword. With domestic consumption weak, factories are overproducing, leading to political backlash from trading partners worldwide.
” I was just in Beijing uh a week ago and I’ll tell you it’s the worst economically I’ve seen the Chinese perform in decades. The leadership is aware of it,” said Bremmer, president of Eurasia Group.
These economic pressures are reshaping China’s foreign policy. Beijing is showing less willingness to engage in confrontational behaviour and is actively seeking to reduce tensions with key partners.
“This is a time when the Chinese are highly aware of not wanting confrontation geopolitically around the world. That’s led to more engagement, um it’s led to less willingness to be assertive and aggressive and respond with perceived slights with tit for tat. It’s also absolutely the reason why Xi Jinping decided this was the time to reach out to India and to have a very successful bilateral,” said Bremmer.
This shift was evident in 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 thaw in relations, experts suggest this change might be temporary.
“I don’t think the Chinese have changed their overall long-term strategy,” Bremmer explains. “But for the near term… I think this isn’t just a matter of a few months. I think this is probably a few years because China’s problems are structural.”
This economic situation has also influenced China’s role in BRICS, the economic bloc that includes Brazil, Russia, India, China, and South Africa, which recently expanded to include four new members. The group is gaining importance as a platform for Global South cooperation, though member countries maintain varying relationships with Western nations.
Despite discussions about reducing dependency on the US dollar within BRICS, significant changes to the global financial system appear unlikely in the near term. The dollar’s role in global trade remains largely unchanged since the 1990s, even as other currencies’ relative strengths shift.
For Chinese leadership, the immediate priority appears to be stabilising the domestic economy rather than pursuing aggressive foreign policy objectives. This economic reality is forcing Beijing to adopt a more pragmatic approach to international relations, at least for the foreseeable future.