Decoding the China puzzle Xi Jingping & the relations with India [Part 2]

Decoding the China puzzle: Xi Jingping & the relations with India [Part 2]

In Foreign Policy
11:39 PM, Aug 15, 2016
Shashank Davanagere

We saw how China fared after Mao, how Xi became the most powerful President after Deng, and how the persecution of a spiritual practice, Falun Gong, caused the deepest divisions in present day China in “Decoding the China Puzzle [Part 1] (https://www.myind.net/decoding-chinese-puzzle-political-history-china-part-1) . This piece will explore what Xi’s plan for Chinese future is.

Xi’s foreboding plan

Unlike in India, in China, the People’s Liberation Army (PLA) and the Communist party have been inseparable since their birth. Mao took China riding on the shoulders of the PLA and since then China has had a Soviet-style joint military-civilian command. Though the actual action of the civilian command doesn’t extend beyond the topmost generals. It also grew with Chinese economy and has become extremely bureaucratic. Xi, a princeling, and son of a famous revolutionary commander, wants to transform the primary focus of the PLA i.e. defending China into a smaller, modern force capable of projecting power far from its shores ^[27]. Mao said “power flows from the barrel of a gun” and Xi seems to make sure that when time comes, he holds that gun.

His speeches and workings have all been geared towards making PLA a very capable fighting force. He has laid off about 300,000 ground troops, with a promise of much more in the future. At the same time, the overall capability of PLA has increased, according to US intelligence officers ^[22]. He has broken the commanders’ fiefdoms and remodeled them on US lines of “Theater Commands”. He has also detained at least 41 serving generals under the nationwide anticorruption drive. Analysts believe that by doing so, Xi is casting himself as a strong military leader and by having a more hawkish worldwide view, wants to replace the US, who the Chinese believe is declining, as the dominant military power in Asia. He has a very precise date to achieve this “China Dream” – 2049, which marks the 100^th anniversary of CCP coming to power.

The foreboding nature of Xi’s plan comes into play when one marries this “China Dream” with what he believes is the root cause of fall of Soviet Union – lack of party’s control over the military. In December 2012, Xi gave a speech to the leaders of PLA where he gave an extremely significant confirmation that the PLA’s primary function is to defend the regime, not China ^[28]. This was the lesson learned from the Soviet Union’s collapse, he said. “In the Soviet Union, where the military was depoliticized, separated from the party, and nationalized, the party was disarmed,” Xi warned. “A few people tried to save the Soviet Union; they seized Gorbachev, but within days it was turned around again because they didn’t have the instruments to exert power.” Nobody in the vast Soviet Communist Party, Xi averred, “was man enough to stand up and resist.” As the son of one of Communist China’s founding generals, Xi’s speech reflects a lot of his mindset and highlights his political ambition ^[28]. His reference to Gorbachev is very significant. His predecessor Hu also blames Gorbachev for the fall of Soviet Union. Xi, obviously, doesn’t want to end up as China’s Gorbachev. What it signifies is that the “political reforms” is an area that Xi will not touch, no matter what ^[29]. The PLA-CCP structure is so joined together at the hip that any reforms could trigger upheavals and lead to the fall of the regime.

It is looking more and more like Xi wants to put an end to the Shanghai gang of Jiang Zemin under the guise of corruption. The Xi Jinping power structure emanates from a group called the “Chinese Youth League Gang.” Li Keqiang headed the League from 1993 to 1998 and is drawing his associates into the power structure.

This structure has been rapidly replacing the prior security and police forces with an aggressive anti-corruption cadre since coming to power in 2013 ^[35]. None of these actions will matter to the Chinese public as long as the economy continues to grow. Right now, the Chinese government is the wealthiest government in the world, and that’s the source of the “three confidences” (“confidence in direction, confidence in theoretic foundation, and confidence in system”) that Xi Jinping recently voiced ^[28]. The foundation on which Xi is building his empire is the strength of the Chinese economy.

Current state of economy

Since the introduction of the economic reforms in 1978, China has become the world’s manufacturing hub, where the secondary sector (comprising industry and construction) represents the largest share of the GDP. However, in recent years, China’s modernization propelled the tertiary sector and, in 2013, it became the largest category of GDP with a share of 46.1%, while the secondary sector still accounted for a sizeable 45.0% of the country’s total output. Meanwhile, the primary sector’s weight in GDP has shrunk dramatically since the country opened to the world ^[30].

China weathered the recession of 2008 much better than other countries primarily on account of its solid fiscal position. In November of 2008 a substantial 4-trillion-yuan stimulus package was released which propelled the economic growth mostly through massive investment projects, which triggered concerns that the country could have been building up asset bubbles, overinvestment and excess capacity in some industries. The stimulus program bolstered investment, while households’ consumption remained repressed

A recent HSBC report which has a PMI [Purchasing Manager Index] about China’s manufacturing sector put it as 49.6. If the PMI is about 50 then it denotes that the manufacturing sector is expanding and anything less than 50 indicates that the sector is contracting. This has sent jitters in China and world economy. So all these has led the Chinese government to report its annual growth as 6.9%. This was the slowest in the past 25 years and before 2015, the 7.3% growth rate of 2014 was the slowest. Economists feel that China has to grow at a minimum of 7.5% to keep the low unemployment rates.

Already many analysts believe that the official growth rate of China is just a man-made number and that the Chinese economy’s is in deep red with growth rates of only 3% or so ^[31]. If you were to look at the slowing [or the already slowed down] economy and Xi’s plan for future vis-à-vis PLA modernization, it makes perfect sense. Any increase in unemployment coupled with a growing disparity in incomes is a potentially deadly combination in any country, more so in China.

So what next?

Xi is at a moment when China has been building up its military power, surprising the United States and shocking its neighbors with the speedy development of new hardware and the aggressive manner in which it has deployed those tools to support its expanding ambitions. By violating Party norms and unwritten agreements among the ruling elite, Xi, has opened gates for his persecution in the future. It is widely accepted that the legitimacy of the Chinese Communist Party rests, in large part, on the economic progress that China has experienced ^[5]. In the event, therefore, of set-backs or reversals in that progress, Xi's paramount position would come under severe pressure.

It is in this backdrop that the conflicts of South China Sea, Senkaku islands and even denying NSG entry to India should be looked at. China is trying to portray itself as standing alone against the might of the world.

It is very clear from speeches that Xi has given that he intends to rally both CCP and PLA around a common cause like Mao did. Mao was fighting for independence from the corrupt regime and was able to do it. Deng did that using economic reforms, but that had the side effect of corruption seeping into Chinese system so much so that it was rumored top General positions were often bid upon. Xi wants to root out corruption from CCP and PLA without disturbing the delicate balance and, more importantly, without making powerful enemies he cannot control. The way he has chosen to get the people on his side is by rallying them towards a common external “enemy”, and the PLA by rallying them towards “China Dream”. Xi is playing a game fret with danger not only to China but to the entire world which is being played on a razors edge.

Indian context

Notwithstanding Chinese blockage of NSG entry, India is probably in the best position to milk the situation to the best of its ability. India views the South China Sea as a secondary phase of influence and currently it doesn’t have the naval capabilities to challenge China in SCS. But that did not stop India from sending four naval vessels into the SCS for a two-and-a-half-month long naval exercise with the navies of US and Japan. All the major powers in the South China Sea are trying to achieve an advantageous outcome by pushing dangerous events to the edge of active conflict ^[32]. India has economic and defense contracts with Vietnam, which China has objected to.

With US pivoting towards Asia-Pacific, it’s becoming more wary of an increasingly asserting China. As a result India and the US are moving closer to each other. US already has agreements in place with Japan and Philippines. India and the US have recently agreed, in principle, to sign the Logistics Support Agreement (LSA). USA wants India to sign two more - Communications and Information Security Memorandum of Agreement (CISMOA); and the Basic Exchange and Cooperation Agreement (BECA) for geospatial intelligence ^[34]. If, more likely when, these are in place, it will boost US and Indian ties at the same time irking China. India doesn’t yet want to escalate issues with China given they both share a long and disputed border. Also, in China, a dispute with India doesn’t generate as much passion as it does with Japan.

One thing that we should probably understand is that China has no intention of waging any war neither with India nor with any other country. China needs the world more than the world needs China. For all their bravado the Chinese know this and it would be better for India to recognize this. The Naval strength and missiles that China is so keen on building is mainly to safeguard the trade lines – for its energy needs and exports.

2017 is a very crucial year for Xi and China. Because five of the seven members of the Standing Committee are to be replaced in 2017, this would be the moment for his opponents to challenge him by nominating a successor. The mere existence of a potential replacement could be a political death sentence for Xi, given widespread anger against him within the Chinese government. At the same time, any slowdown in Chinese economic machine will only exacerbate this issue for Xi. Most of the development in China’s been in the coastal areas while the hinterland is still in poverty. So the government subsidizes a lot in these regions. With the slowdown in economy, these “minor” issues also have a potential of flaring up.

Eventually, I believe, at some point in future, all these issues will combine to create a sliver of opportunity for India to grab the momentum from China. We should be ready for it, but are we? Only time will answer that.

References:

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