China has some lofty ambitions that might not come to fruition.

After a three-day negotiation in Beijing, the Hamas and Fatah factions, along with twelve other Palestinian groups, reached a reconciliation agreement on July 23. This development marks a significant shift, given that Hamas and Fatah have been in conflict since 2007.

China’s role as a mediator in this process has garnered positive reactions from various stakeholders. Bonnie Glaser, Managing Director of the Indo-Pacific Program at the German Marshall Fund, observes that China is positioning itself as a champion of peace and a constructive force, contrasting sharply with the United States, which is often seen as a source of instability.

China’s involvement in peace efforts is not a new phenomenon. Between 2002 and 2011, China engaged in numerous peace initiatives through diplomatic strategies such as shuttle diplomacy, document diplomacy, and special envoys. These efforts extended across countries, including Afghanistan, South Sudan, Zimbabwe, Rwanda, and Nepal.

The effectiveness of China’s approach is a subject of debate. Wu Bingbing, Director of the Middle East Studies Center at Peking University, argues that China’s strategy seeks stability through “positive balancing.” China aims to exert pressure on the opposing party to reciprocate by fostering close cooperation with one party.

However, some scholars interpret China’s mediation efforts as a strategic move to gain support from Muslim-majority countries concerning the issue of Xinjiang’s Muslim population. P.S. Suryanarayana, a Senior Fellow at the Rajaratnam School of International Studies (RSIS), posits that one underlying motive for China’s mediation in the Israel-Palestine conflict is to secure backing from Islamic groups or blocs. Such support could bolster China’s position in addressing domestic threats posed by terrorist groups like the East Turkestan Islamic Movement (ETIM). This international endorsement would legitimize China’s actions against ETIM and potentially reduce U.S. influence in the region.

So, what are the primary objectives behind China’s engagement in these peace processes? Is it merely an effort to project itself as a global peacekeeper and an alternative to the U.S., or is there a more profound goal of securing support from Islamic nations?

A recent study suggests that China’s involvement in peace efforts—from Saudi Arabia-Iran to Russia-Ukraine—closely aligns with its strategic economic agenda. China aims to foster political stability through various negotiations and peace initiatives, to create a favorable environment for long-term economic cooperation with its key trading partners. By emphasizing stability, China seeks to mitigate the adverse effects of conflict and ensure that post-conflict nations can actively participate in and benefit from the Belt and Road Initiative (BRI).

The study also highlights the geopolitical significance of regions like the Strait of Hormuz in the Persian Gulf, the Suez Canal in Egypt, and the Bab-el-Mandeb Strait in the Red Sea as critical maritime transport routes linking the East and West.

What challenges is China confronting that drive its enthusiasm for mediating various international conflicts?

In recent years, analysts, including those at the Centre for Economics and Business Research (CEBR), have forecasted that China would become the world’s foremost economic power by 2030. Their 2022 projections were based on the belief that China’s economy would maintain a robust growth rate of 5.7% until 2025 before moderating to 4.7% by the end of the decade. Yet, as these milestones approach, this optimistic scenario appears increasingly elusive.

To fully grasp why China’s economic trajectory may be faltering, it is essential to undertake a nuanced analysis of its current economic conditions. Only by understanding the intricate dynamics at play can we assess whether these predictions will hold or if new realities will reshape the global financial landscape.

Experts suggest that China is experiencing the “China Peak.” The era of rapid economic growth is nearing its end due to several factors, including overproduction, the ramifications of the U.S.-China trade war, the impact of COVID-19, and the collapse of the domestic property sector, which has been a significant component of China’s economy.

Xi Jinping, China’s paramount leader, harbors substantial ambitions despite these challenges. He is committed to restoring China’s prominence by 2049, a goal that hinges on achieving a “moderately prosperous society,” which involves increasing per capita income to $10,000 by 2021. Subsequently, China aims to evolve into a “fully developed, affluent, and powerful nation.”

China understands that prolonged conflicts and wars can result in severe humanitarian and economic crises. In response, it is committed to promoting stability by initiating peace processes and encouraging robust economic cooperation.