China is in economic trouble though not many analysts are willing to say so openly. The 12% p.a. GDP growth engine, built over 30 years, is struggling to maintain 6%. Its highly speculative stock market balloon refuses to stay up, despite repeated and desperate pump-priming. China’s massive but second-rate military machine, low on original R&D, high on copied US and Russian designs, is becoming hard to finance.
The country’s massive debt overhang is threatening to engulf its economy. The huge 1.5 billion population, held without any political freedoms, is not amused at the dwindling economic prospects and idle capacities.
China’s proactive overseas efforts at infrastructure building to substitute for its nearly gone exports, have bought it many hungry dependants in Asia, Africa and Latin America.
These have generated stacks of IOUs, but hardly any paying partners. And yet, tonally, modern China always likes to dictate terms.
It is probably an old affliction, coming down from the mandarins of the “Middle Kingdom”, who famously declared the rest of the world: barbarians Things did not end well for that imperial China.
It was drugged, humiliated, and carved up into spheres of Influence by the European powers and Japan.
Then came the onset of Communism, and pride restored. And now, towards the end of the second decade of the 21st century, it is faltering once again.
It does have a massive economy at $12-14 trillion, second only to the US. But China is unable to make worthy friends to partner future growth. It only gets on with vassals. And this inability is ominous.
Its single party “Communist” political apparatus, builds an obtuse, predatory, attitude. This is consolidating great power opinion against China and its one-sided policies.
It won’t, for example, countenance anybody speaking of Taiwan’s nationhood, but asserts, despite international disapproval and legal indictment, its hegemony over the South China Sea. It wants India to join the CPEC and use Gwadur, but glosses over its coercive policies in Baluchistan, ignores Chabahar, and the illegality of running the CPEC through India-owned PoK.
It runs a $52.7 billion trade deficit in China’s favour, not unlike a similarly askew position with the US and practically every other major trading partner.
Its FDI in India, after a six-fold increase since 2014, still stood at under $ 1 billion ($870 million), even in 2016.
India’s exports, including IT and pharmaceuticals, account for just $9 billion, and hordes of other things like oil seeds, tobacco and rice suffer from lack of market access.
It claims Arunachal Pradesh and culturally and demographically alters Tibet, with a high altitude railway, mega infrastructure projects, airports, and floods of Han Chinese. It warns India on the activities of the Dalai Lama with great regularity.
It finances and trains Maoists, ULFA, Burmese insurgents and other anti-national forces in order to blatantly subvert India.
It uses Pakistan to consolidate its hold on PoK, and harass India in Kashmir. China won’t agree to India’s entry into the UNSC or the NSG using hypocritical arguments. It backs Pakistani terrorists like Masood Azhar against UN censure.
It backs a megalomaniacal regime in North Korea into menacing South Korea, Japan, and threatening the world with a nuclear holocaust.
Chinese media mouthpieces instruct India to blindly accept capital from anyone that is offering it. This, to wrap around a plea suggesting China would be a right partner in the modernisation of the Indian Railways.
But what is China offering politically, let alone economically, in return? As for capital, it is after all also on offer from others.
But like Saudi Arabia and other oil-rich Arab states coming to terms with their much reduced leverage in world affairs, China too will have to come to terms with its diminishing clout.
Like Libya under Muammar Gaddafi, all Chinese efforts at regional, let alone world domination, is doomed to fail.
China might be impressive to countries like Nepal, Sri Lanka, Myanmar, Pakistan, but these are essentially impoverished guests at the Chinese table.
In the larger world of real power politics, it can only persuade an economically needy but very advanced military power like Russia to ally with itself on a case-to-case basis. India too cannot substantially partner with China unless it radically changes policy.
This however may be impossible. But, history may prove that China cannot, in the end, do much with its guns, tanks, and missiles, after all.
The US, and the Western global powers it seeks to displace, may force it to blink first. And this, not with its superior military might, but using relentless economic pressure.
Meanwhile, India, the fastest growing major economy in the world, is recognised far and wide as a wonderful and sustainable economic opportunity. It runs a stable ship and does not lack for suitors.
China should therefore get off its bully pulpit for its own sake. It should humble itself in order to persuade. It must trade favours to get ahead.
Because, strategically, the crude sabre-rattling is steadily turning India into the West’s regional bulwark in South Asia.
And nominally, it has forced India to prepare for simultaneous aggression from both China and Pakistan. Now, where is the commerce in that for China and its think-tanks?
(Gautam Mukherjee is a blogger on politics, economics and policy. His twitter handle is @gautammuk)
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