In a cogently argued work, backed by meticulous data, journalist Gaurie Dwivedi records how China worked single-mindedly to entrench its preponderance in trade vis-à-vis major countries and regions of the world in pursuit of its goal to rise as the premier world power. Beijing strove to achieve this geo-strategic dominance by becoming a presence in the Indian and Pacific Oceans, and made major investments in Pakistan, Sri Lanka, Myanmar, Bangladesh, Djibouti, Maldives, and other countries. It thus enjoys a commanding presence on global sea routes and potential choke points.
The question Dwivedi poses is whether the United States is still powerful enough to take on a rival on its own steam.
Beijing operates on the premise that the United States is a declining power, and that economic heft will determine the global hegemon of the twenty-first century. Its Belt and Road Initiative (BRI) seeks to link oceans and land routes across Asia and between Asia and Europe, and even embraces Africa and South America. The China-Pakistan Economic Corridor (CPEC) aims to link Central Asia and the Arabian Sea and provide economic opportunities across the Eurasian region. Pakistan has given the strategic Gwadar Port on a 40-year lease to the China Overseas Port Holding Company (COPHC).
Interestingly, Dwivedi points out that President Xi Jinping has roused domestic sentiment on an ancient and vague concept, ‘Tianxia’ (‘all under the heaven’), which avers that the world was divinely bestowed upon the emperor as ‘son of heaven’ with ‘heaven’s decree’. This posits the Chinese emperor as epicentre of the world, with other countries as tributaries or vassal states. Modern China, she says, expects the BRI to create vassal states all over the globe, with Xi Jinping acknowledged as ‘legitimate sovereign in the world’.
Delving into political psychology, the author asserts that China under Chairman Mao was determined to avenge its ‘century of humiliation’ at the hands of the West, and Japan. Deng Xiaoping advised, ‘hide your capacities and bide your time’, and focused on building economic might. China’s high growth trajectory was fully aided by the West, but it simultaneously built military capacities, especially naval, and asserted territorial ambitions.
Today, China is a superpower in a hurry, with disproportionate influence over several countries due to the BRI. More notably, Dwivedi points out, China wields vast influence in the United Nations as it has placed its citizens in key UN bodies, a fact hitherto unnoticed in public discourse.
However, she overlooks the fact that Beijing’s greatest weapon in its quest for world supremacy is its lack of ideological baggage. Unlike the United States that talks of democracy and liberal values while cohabiting with dictators, China pursues its strategic objectives amidst political and cultural diversity.
As a manufacturing hegemon, China is hungry for natural resources, especially mineral resources. It has enticed many resource-rich and strategically located small nations into a debt trap via large development projects that do not yield immediate returns. Unable to service the debts, these nations are compelled to mortgage the assets for several decades, thus compromising their sovereignty. Through such means, Beijing’s influence spans much of Asia, Africa, and even Europe and Australia.
Statistical research is one of the strong points of this work, which is a mine of information for future scholars. Beijing has the potential for success, the author claims, because its GDP is over 70 per cent of America’s GDP, whereas throughout the Cold War, Soviet GDP never surpassed 40 per cent of America’s GDP. China aims to become the world’s largest GDP by 2028.
This is feasible because America lacks its old economic muscle, largely because its elites off-shored its manufacturing (and hence jobs) to China and other countries. Indeed, China’s economic dominance is so great that the author rightly concludes that Washington will need allies to confront Beijing, and identifies major European nations, Australia, Japan, Taiwan and India as potential allies. But while it is true that these countries are usually still well disposed towards America, most of them suffer enormous trade imbalances and other disabilities vis-à-vis China, which will take time and sustained efforts to overcome.
The author hopes the coronavirus pandemic could become a catalyst to unravel the many layers of influence that Beijing wields, but this seems unlikely given the fact that the World Health Organisation is unwilling to confirm that the Covid-19 pandemic could have originated in Wuhan. In fact, the pandemic exposed the extent of the world’s vulnerabilities and its China dependence. China flexed economic muscle against Australia for seeking an enquiry into the origins of the coronavirus, and banned exports worth $3 billion, seriously impacting the Australian economy.
Seoul faced economic retribution for deploying the American missile defence system, THAAD, in 2017 (actually, President Trump forced South Korea to accept the system). Norway angered Beijing when Chinese dissenter Liu Xiabo was awarded the Nobel Peace Prize. China has mastered the art of weaponising trade and has frequently made thinly veiled threats against India, Australia, Japan, Taiwan, Vietnam, and others.
China’s territorial ambitions have caused tensions with Malaysia, The Philippines, Vietnam, Japan, South Korea and India. It routinely violates the maritime boundaries of its neighbours in the South China Sea and the East China Sea, with a view to monopolise the exploitation of the unexplored oil and mineral deposits there; the methane hydrates in the seabed could power China economy for decades. Besides rich fishing grounds, these are important shipping routes that China does not want other powers to control.
Indeed, China is so intimidating that even after the UNCLOS ruled in 2016 that Hainan is China’s southernmost territory and the Scarborough Shoal belongs to The Philippines, China remained in control and Manila did not dare to act on its victory. Under the invented nine-dash line, China occupied Mischief Reef in 1995 and fortified it heavily, but Manila managed to defend the Second Thomas Shoal.
China’s land grabs are sustained and systematic. In 1946 it took over half of the Paracel Islands from Vietnam and completed the occupation in 1974. In 1987, it took the Fiery Cross Reef for a radar weather station and in 1988, Subi Reef from Manila and Johnson South Reef from Vietnam. This was resisted and 69 Vietnamese soldiers died in the conflict. In 2013, it took the Luconia Shoals from Malaysia, though they lay firmly within Malaysia’s Exclusive Economic Zone.
While the author’s earnest pleas to contain Chinese hegemony may not yield a sustained and united response in the near future, China will not have its way all the time. In May 2021, Iraq urged Russia’s Lukoil PJSC not to sell its stake in West Qurna-2 field to Chinese companies. West Qurna-2 field is one of the world’s largest fields with recoverable reserves estimated at 14 billion barrels. Later, when ExxonMobil agreed to sell its 32.7 per cent stake in West Qurna-1 oilfield to two Chinese firms in January 2021, Baghdad moved to buy the same as China already had a stake of 32.7 per cent and any addition would make Beijing the virtual owner of the oilfield with recoverable reserves of more than 20 billion barrels.
Further, Beijing’s weak spots include strategic technologies such as semiconductors, computer chips and perhaps still, artificial intelligence, and the West has become wary of China’s predatory practices to acquire technology in these fields.
To militarily contain China, the author has pinned her hopes on the QUAD so as to check China’s rising influence in the South China Sea and Indian Ocean Region. The strategically located Andaman and Nicobar Islands can be the gateway for a larger Indian presence in the region, even up to the Western Pacific. For this, however, India needs to seriously augment her defence budget and modernize her navy. New Delhi must also prepare to be a pivot of the fourth industrial revolution, boosting manufacturing, exports and crafting new trade deals to stand up to China.
Certainly China is not invincible. The author warns that the next financial crisis will involve China as its debt has risen from 140 per cent of the GDP in 2008 to over 260 per cent by 2019. This is over 5 per cent of global GDP; hence Washington needs to prepare a plan to contain the damage to other large markets. She argues for an effective sanctions programme against China and sustainable project finance to other countries to reduce their exposure to Chinese loans; however, both are unlikely in the current financial scenario.
Finally, the author wants the World Trade Organisation to be reset. America, India and Japan, she argues, that have the potential to hurt Beijing economically, must finalise new trade deals with China and insist on subsidy cuts by the Chinese government. The USA, the EU and India must enforce coordinated tariff hikes disadvantaging Chinese negotiators in trade talks, as Donald Trump’s repeated tariff hikes had forced Beijing to negotiate.
However, the ascent of the Taliban in Afghanistan in recent days has changed the world scenario completely. It remains to be seen if this will curtail Beijing’s ambitions in the long term. Certainly, the development has revived Beijing’s fears of Uyghur militancy in Xinjiang, which joins Afghanistan via the narrow Wakhan Corridor. The Uyghur have long demanded an independent republic of East Turkestan, and the East Turkestan Islamic Movement (ETIM) and Turkestan Islamic Party are fighting for Uyghur secession. ETIM has ties with Tehrik-e-Taliban Pakistan, al-Qaeda and the Islamic State.
There is little doubt, therefore, that the sudden events in Afghanistan have disconcerted China, Russia, Iran and India. Much of the world has few illusions about China but just as Washington remained invested with Pakistan throughout the so-called war against the Taliban, American capitalists remain deeply wedded to the Chinese economy and as of now, are not considering a reset. China’s day of reckoning is not tomorrow.
Chintan India Foundation blog, 3 September 2021