What Should We Expect Now

There is no such thing as a “China Expert.” Such is the secretive nature of China’s communist party that information barely trickles out of the ‘bamboo curtain’ and is seldom verifiable. Many China analysts are left red-faced when their assumptions are disproved, or their analysis turns out to be based on untenable facts. The resulting chasm in understanding China, its culture and global objectives cannot be plugged by making Sun Tzu a part of the curriculum at Sandhurst or West Point. Small wonder that in times of the pandemic, the reaction to China’s much more muscular approach in its geopolitics ranges from the absurd to the speculative. Baseless theories such as an over-reaction from a beleaguered regime abound. One theory which may not be far from the truth is that it is an integral part of a grandiose strategy for world domination.
There is no denying the fact that China’s objective is to colonise weaker economies right up to Central Asia, South America and Africa by imposing terms for debtor nations to allow access to ports and other critical infrastructure facilities. Looking at the map of the ‘Belt-and-Road Initiative’ it is easy to see how countries up to Europe would become dependant on the BRI, dubbed as the new silk route. This could be accentuated if the maritime routes were to face a blockade – the Strait of Hormuz by a belligerent Iran or the Strait of Malacca by India or the Quad for instance.
The crisis in the Himalayas is not accidental and the West would be foolish to dismiss it as a territorial squabble over a few hundred kilometres of barren land caused by faulty British cartography. The areas which have sparked the conflict overlook the China-Pakistan-Economic-Corridor which passes through territory which India has historically claimed to have been forcibly occupied by Pakistan and now ceded to China. If Pakistan cedes more of the disputed Kashmir region to China, the world will be unable to prevent a bloody conflict which could quickly snowball and assume unmanageable proportions.
Another reason why the two countries are locked in an eyeball to eyeball confrontation is that the rivers of India, Bangladesh and South East Asia originate in the Himalayan region. Anyone who has thought about the reasons why the next great war will be about water will realise the strategic importance of this region and China’s desire to control it.
China has consistently, equated India with Pakistan, obstructing its acceptance as a permanent member of the UN Security Council and opposing it at every opportunity in the Nuclear Suppliers Group. India’s significant role in the Quad and fears that the Quad could become militarised can only be catalysts to China’s quest to teach India a lesson. Viewed through this prism, it is clear why a Chinese strategist in Beijing, would consider the pandemic to be an opportunity to put India in its place, before it becomes a huge spoiler. This realisation may be a rude but inevitable shock since even if there were no long-term strategic reason, if China’s objective is world dominance, it must first cut India down to size.
It is not fanciful for analysts to consider the rivalry between the two most populous countries as being civilisational. Students in Chinese universities will tell you that China sees itself as a superior culture, suppressed so far because of Western colonialism. Although Indian history dates back much further, it sneers at India as an inferior and weaker civilisation.
Meanwhile, academics such as the virulently anti-American, Professor Madhubani believe that China has already won the race for ascendancy. Oblivious of the fact that it is fatal to underestimate America, the fallacy in their argument lies in assuming that economic growth in GDP terms is the sole measure of a nation’s success. GDP is merely the sum total of all transactions in an economy. Even if China does surpass the USA in this metric, this by itself, would not make it the new economic powerhouse, leave alone the world’s dominant power.
The United States became a global power after the second great war due to a new world order which was driven by the inherent needs of its allies. Quite simply, the dollar would be the central reserve currency, fuelling its economic dominance, while the U.S.A. would guarantee the security needs of its friends and allies. Aptly labelled by some commentators as the “guns for butter” deal, this quid pro quo was not entirely transactional. Despite differences with its allies and diplomatic arm-twisting, America did not expect them to circumvent their national priorities in deference to its own dictates. In large part this is because the allies being western democracies were inherently aligned on the core issues. Every member of the family was at the dining table, even if some were allergic to the soup. China, on the other hand, attempts to use its financial muscle to coax, bully and threaten nations into co-operating with it in an attempt to spread its own version of what it hopes will be a new world order. This can succeed only up to a point, beyond which the countries in its sphere of influence will face internal strife and unseating of those in power.
Dim-witted economists conclude otherwise on the assumption that becoming the largest trading partner of the rest of the world equates insurmountable power and influence. Yet, there is no reason whatsoever for the world to shift to the Yuan as its central reserve currency. How many countries would be comfortable maintaining its reserves in the currency of a nation which had Tiananmen Square and continually attempts to impose its hegemony across the globe? The kind of flux that such instability brings cannot be underestimated. We have already witnessed this when according to some reports, there was a flight of capital of around $1.5 trillion when China briefly allowed capital account convertibility. When Chinese people do not trust their money to remain safe in their own country, how will the rest of the world do so? In plain terms – does any economist seriously believe that the best and the brightest will stop making a beeline to New York and California and head instead to Beijing? There is a reason why China has had to resort to stealing intellectual property and will continue to need to do so.
The central fallacy is in ignoring the close relationship between economic and political systems. A country which has no qualms about tracking the movements of its people, censoring free speech and stamping out political opposition will never prosper to the point of fostering a creative and progressive environment which breeds innovation and prosperity. Both these attributes arise out of respect which is a much more subtle measure than the GDP. The failure to understand that power and influence flow from respect and not bare muscle is stark. There is a close nexus between economic power and politico-social values and those who think that economic size will result in China imposing the Yuan as the central reserve currency, are unrealistic at best. The efficacy of an economy depends not so much on its quantum and size but more so on the quality of the produce and the lives of its citizens.
Those who think that with the U.S.A. looking increasingly inwards, will now enable China to step into the breach, are in for a rude shock. Meanwhile, much to its chagrin, India now finds itself a frontline State resisting Chinese hegemony, without having earned the recognition of being so by a delusional world which is still living the dream of globalisation and social democratic values as a way to prevent or negate the rise of rogue nations with a hateful agenda basking in the illusion of its ability to restore the glory of their ancestors.