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US China like Siamese twins & Xi's Achilles Heel

by Priti Prakash | PUBLISHED: Apr 18, 2023, 10:57 am IST

Priti Prakash
Priti Prakash
Doklam was again in news. The recent statement by Bhutanese PM that china has an equal stake in our boundary issue is an indicator enough as much as it gives away PLA long term designs, should worry us. Even though Bhutan is under the security ambit of India, China is assiduously working at nibbling away this geography that will give it strategic leverage over the entire Sikkim Arunachal region.

Our economic dependency on China is a defining factor in many ways. Whereas in 2006 about 6% of exports were from China, by 2018 it was almost 40%. As a result we have a live boundary and dependency & for the last 2 and a half-3 yrs there have been no signs of either the statusquo being restored on the border or some political or other leverage being given to change china’s behavior. Also domestic politics in either country does not permit real change or movement in the relationship.

After Xi Jing Ping has sealed his lifetime chairmanship of the Communist Party its for him to deliver on what China sees as her moment in history and future. And this is not just about how he gets back China’s economy rolling, engineering social harmony, boosting growth, its also about fulfilling ‘China Dream’ of being a superpower. The brokering of a much famous truce, almost an impossible, between Saudi and Iran has etched them as a successful mediator as much it has been able to signal the receding of American power.  They are trying their hand at Russia Ukraine crisis too although it may be a much tougher call here.   

Former Foreign Secretary Shyam Saran says, 'China operates on a relative balance of power as she perceives it. As long as she thought US was superior and powerful, until 2008, she went along loyally with the US. After 2008 financial crisis when she thought that the end had come for western dominance their approach changed. They want to now consolidate their gains & appear strong.' In that condition assumptions are that they are not going to give us back (Indian territory seized by them) much at least for a few yrs till the situation changes drastically either within China or elsewhere.

The Inside Story

Under Xi JingPing Chinese politics is heading towards being increasingly nationalist, centralised, authoritarian. A country that spends more on its internal security than it does on national defence since Xi came to power in 2012 is an indicator of the state of its society marred with tension within. In his 19th Party Congress Xi minced no words in indicating that China aims at greater goals of primacy in not just Asia but in the world.

Former NSA and Ambassdor Shiv Shankar Menon says ‘For me the likely outcome is a China which will be a predominant Asian military power, a global economic power but will face increasing friction at home. And a powerful frustrated China is not a good prospect for anyone.’

Before 2019 China accounted for 40% of growth in world economy but now with growth slowed down & recession in the US & west Europe one sees Sholtz Macron as also Ursula of the EU along with Spain calling on Beijing.

The internal dynamics in china has defined what has happened there in last 3-4 yrs. 3 things have happened. Firstly Chinese economy has slowed down tremendously, last yr it was 2.8%. There has been no productivity in China for the last decade. Xi has to get that economy going again. Its his achellies Heel.

He cracked down on private sector which actually created jobs instead of state owned enterprises which he banked on & put party committees into them. Property sector having inflated with private investment and where most of chinese peoples money have invested, if crashes will be a huge disaster.

The other is the problem of social control. China is the worlds strongest surveillance state with remarkable technologies & data being managed at any moment is stunning. Untill 2012 they used to publish figures for mass incidents, meaning any protest involving more than a 100 people. In early 90s there were around 2000-3000 protests a year as they acknowledge. By 2012 the number rose to 200,000 & so they stopped publishing & started building this surveillance state. Acquired from countries like Malaysia and some others they have exported this technology to 89 countries around the world pre covid. Its very attractive to any potential dictator autocrat as Menon says.  

Thirdly internal security is a major issue. If one goes by his party Congress report he has securitized everything. There are around 13 kinds of security including ideological security, says a China hawk. Nothing is known enough as it is increasingly a closed & a centralised system.  

A former top Diplomat who knows China like the back of his hand revealed that in Chinese system earlier the coordination was only at the Vice Minister level, equallent to secretary in the govt. In today's China all are supposed to report to Xi and his secretariat directly which has taken away the incentive of competetion and reporting the truth. They would rather speak what the boss wants to hear.

What about the BRI

China’s Belt and Road Project has also not been a huge favourite with many countries. The problem is china has already committed a trillion dollars in BRI and can't suddenly pull it back. 2016 saw trillion dollars of capital flight out of China when they had to close down. Having seen the energy crisis courtesy Ukraine they need the Middle East now.

Ukraine too has affected BRI very badly and the push back by countries which otherwise really depended on China like Khazakistan, even Pakistan has tremendous local resistance to BRI projects mainly bec BRI projects don’t use locals or local companies.

Former NSA and Ambassador Shiv Shankar Menon says ‘We need to look at our interest. We need to step up our game with our neighbous, open our economy to them and to integrate the sub continent like we became the net security providers to some of our neighbors including Bangladesh which transformed our relations with them.’

He says, ‘India has affinities in the neighbourhood that china doesn’t have & china’s record is not that great. We need to insist that whatever they have built is open, accessible to us & make commercial sense. That you don’t want another Hambantota’. In Colombo where 80% stuff is still Indian going through both ways.

Prospects of US China relations improving in near future

As China has started opening up again after zero covid policy has been given up it has once again become a very attractive destination for foreign investment.

Former Foreign Secretary Shyam Saran says ‘Like China we havn't been able to fully utilize our demographic dividend to our advantage.  China was over a period of 40 yrs like a giant sponge absorbing technology, knowledge, capital from wherever it could get.’ As for China’s Global Plus strategy Saran says, not every industry moved out of China. The one's that shifted were mainly those where there had been rise in labor cost like textile or some lower end electronic industry.

Xi’s constraint is at home for which he will seek coexistence and all the talks of globalisation. Americans want to stop their competitor & they have the power. The power balance is in the US’s favour. But in economics US & China are tied together like Siamese twins. There is a limit to decoupling and what they can actually do to each other. It is interesting to note the things that both countries sell each other. Whereas US sells primary commodities, agriculture, aerospace, which is a high end stuff, what China makes is everything in the middle…light engineering. 98% of all Walmart was selling chinese stuff.  So that decoupling is going to be very difficult. Same with us. We can’t decouple from china even though we have a terrible strategic rivalry.
Priti Prakash
Priti Prakash

Political Commentator, Interviewer, moderator and Foreign Correspondent. With more than 20 years in journalism and experience of both print and electronic medium, she is Editor FacenFacts, news website.