China’s Pancontinental Century
The dragon is rising
President Xi Jinping’s first and foremost objective is to avoid the looming ‘middle-income trap’; he has kick-started the process of privatization of state-owned enterprises, reduction of excessive equipment and liberalization of financial markets. China’s working-age population has been decreasing since 2013 and experts presume China has begun to enter “Lewis turning point” – where worker wages begin to rise faster than the rate of inflation because the surplus labour pool has exhausted.
Second, President Xi wants to bridge China’s growing income gap. Recently, claims were made that China has eliminated absolute poverty – though they met wide scepticism. However, apart from veracity of these claims, inequality and distributive injustice are still prevalent in China as asset growth of urban and upper class is constantly increasing. President Xi has talked about reforming tax sector, and reinvigorating the welfare and labour policies to achieve his much-hyped slogan of ‘common prosperity’ to have a handle on rising inequality.
Another of President Xi’s ambitions is anti-corruption campaign that he launched to rectify the spoiled reputation of the CCP. Austerity is being promoted, foreign trips of dignitaries have been curtailed, security of VIPs has been trimmed and crackdowns on defrauders and culprits have been made more vigorous.
Along with that, China, under Xi, is also trying to revamp its growth model. The Chinese economy is beset with a raft of problems like heavy pollution, rising disparities, industrial saturation, inefficient financial market, excessive credit and growing debt, state-dominated banking sector and an obsolete one-child [and even two-child] policy that has reduced the quantum of working labour. The Xi dispensation has proposed a new growth model along with ‘Made in China 2025’ plan that aims to promote advanced, quality manufacturing, private consumption, innovation, green and low-carbon economy and human capital servicing to address the challenges.
China is an upper middle income economy that is based on resource-intensive manufacturing, exports and low-paid labour but these incentives have reached their limits and growth has moderated due to ageing population, slowing productivity, diminishing returns on investments and declining labour force growth. Economic growth has also decelerated due to harsh geopolitical climate, global economic downturn and a messy technological decoupling from US.
On the flip side, Xi’s China has also altered the contours of foreign policy to enhance its influence primarily at international stage. It pledges to:
Maintain and secure national unity including Taiwan
Gain maximum energy security
Dampen the pace of environmental pollution
Dispense with Deng’s doctrine of ‘Hide your strength and bide your time’
Maintain doctrine of “peaceful development”
Leverage bilateral relations with Russia and BRICS, SCO, and UNO.
Many a great strategic initiative has been taken in this regard like multibillion dollar One Belt, One Road (OBOR) initiative under ‘Strings of Pearls’ strategy, Asian Infrastructure Investment Bank (AIIB), New Asian Security concept – that underpins common security, cooperative security and comprehensive security as its very hallmarks — new type of great-power relations that pledge mutual respect; win-win cooperation, strategic trust and people-to-people contacts’, cooperation framework for China-Southeast Asia relations 2013 that harps on good neigbourliness, upgradation of China-ASEAN free trade area, establishment of AIIB to finance regional projects, establishment of ASEAN-China defence dialogue to address regional security concerns.
However, China’s troubles at external front are getting messier and more intricate. The US has openly started questioning One-China policy. Despite China’s objections, the US has started developing official relations with what China considers its breakaway province, i.e. Taiwan. In 2020, US approved arms sales to Taiwan worth around $1.8bn that further strained US-China relations. Recently, Chinese bombers flexed their muscles in Air Identification Zone of Taiwan, a move that was perceived as a threat to territorial integrity of Taiwan which deems itself as a sovereign nation.
Tensions are also simmering in Hong Kong where ‘Extradition Bill’ was introduced in 2018 that allows extradition of culprits to mainland China. Protests broke out against the law upon which the Bill was shelved. However, protests turned into a vibrant pro-democracy movement that increased Beijing’s troubles which is already facing stresses and strains at foreign front. The Xi dispensation passed National Security Law, 2020, that criminalizes secession, subversion, terrorism and collusion with foreign forces to dampen the pace of growing unrest and hysteria.
Xinjiang, an autonomous province in far northwestern China on the border with Mongolia and Kazakhstan – and also the largest province in the People’s Republic of China and the homeland of the Uyghurs people – is also facing strict surveillance and security measures by the state, owing to rising insurgency and Uyghur militancy. Various human rights organizations have condemned internment camps in China which the Chinese government asserts are ‘de-radicalization’ or ‘re-education’ camps. Likewise, Line of Actual Control (LAC) – the demarcation that separates Indian-controlled territory from Chinese-controlled territory – is also still heavily militarized and reeling under the aftershocks of 2017 Doklam standoff and conflagration in Ladakh valley.
China’s assertive diplomacy and militarization of South China Sea is also being perceived as a threat and has been received with scepticism at regional and international levels. Washington has scoffed at heavy military buildup in the Spratly Islands and declared this more as an act of “obstruction of open and free maritime navigation. Recently, the United States approved the sale of F-16 fighter jets to the Philippines amid mounting tensions over South China Sea. The increasing use of “grey-zone tactics,” seizure of Scarborough Shoal from the Philippines in 2012, extensive island-building between 2014 and 2017 and massive patrolling of Chinese Coast Guards in the disputed area have made the prospects of a conflagration all the more imminent.
Though problems like ageing population, market saturation, social disparities and territorial disputes continue to beset China’s dream to grow, expand and open up at international stage, yet China, under Xi, is setting new precedents of growth and development. It is a cocktail of regional cooperation, economic statecraft and smart diplomacy that has made China all the more indispensable and important in the comity of nations. The planned and pre-meditated experimentation with political economy by Xi and his predecessors have started bearing fruit. The dragon is rising and the spectacle will be worth watching!
The writer is a civil servant, serving in the Government of the Punjab. He can be reached at email@example.com