XI’S POWER GRAB ISN’T GOOD NEWS FOR INDIA
If you are a middle-aged earthling you should prepare for Xi Jinping ruling the Middle Kingdom for the rest of your life. The 19th Chinese Party Congress (CPC) has promoted him to the status of Mao Zedong and Deng Xiaoping. Your children may regularly drive along stretches of Xi’s Belt Road project during their lifetime. Your grandchildren may speak of his “China Dream” in the same way people mention the American Dream today.
Large chunks of the Communist Party of China’s top leadership are the Chinese president’s appointees. He has placed his fuzzy ideology into the party’s constitution, making criticism of him tantamount to attacking the party system itself. Xi has also overseen a culture of fear: Over 300,000 party members have been jailed and a third of military officers purged. Thousands have been forced down the path of “assisted suicide.” While many were victims of a popular anti-corruption campaign, all the convicted have been from factions not aligned with Xi.
The overriding priority of the party right now is to get the economy back on track. Yes, the economy continues to grow but how much is uncertain. Most alternative estimates of China’s growth rate knock off three percentage points from official figures. But its original model of export-driven, investment-based growth is slowing down. Beijing has kept infusing huge amounts of money to keep that engine growing but its debt is now heading to unsustainable levels — over 2.5 times the GDP is the most commonly cited figure. Either the laws of economics don’t apply to the country or China must change. The party has gone on about “unbalanced and inadequate development” for years and Xi hasn’t dropped that phrase.
The concern for the party is that its economic success has created an enormous middle class. The bourgeoisie is difficult for two reasons: One, it demands political rights, and two, it is the wellspring of nationalist sentiments. It needs both bread and circuses to stay off the streets. Xi’s ‘China Dream’ is a corpus of writing, saying he understands all this and is the man to deliver on middle class expectations.
Xi was given enormous authority when he came to power because the party was nervous about the economy. But he has not reformed the system. Four years ago, he spoke of allowing the market to play a “decisive role” but big ticket reforms impose short-term job losses. And even Xi seems to fear social unrest enough that he believes he has to first consolidate power — a process that seems to have no end.
Xi’s circle argues his power grab has been because of the entrenched interests that resist reform: Provincial rulers, State-owned enterprises and the military. Xi has appointed a number of market-friendly people to his new Politburo, so he recognises that reforms have to be the endgame of his ruthless rise to power.
Over the next five years, Xi may dig even deeper to set the economy right. The result will be a fair amount of trauma (joblessness and bankruptcies) in the short to medium term. But if he doesn’t do this, China’s economic growth trajectory will go south. Xi’s party congress speech skirted the issue of what China would do in the world other than to say it would play a major and responsible role. Going by his past actions, however, the world should expect a China that will be less willing to compromise on disputes and will contribute to the global public good only when it sees a chance to impose its rulebook on a section of the international order. A world order with Chinese characteristics is what Xi will seek. The exercise of an assertive foreign policy, under the banner of Xi’s promise of national “rejuvenation”, will be the circus offered to its neo-middle class.
But if he fails on the economy, any talk of China reaching parity with the US by 2049 will begin to fade. About 80% of China’s attraction to the rest of the world is its economic success. Chinese Communism is impressive not because of its politburos and dialectics but because of its trade surpluses.A Xi who stumbles would possibly lash out against the rest of the world, convert bits and parts of Asia into the equivalent of the Roman gladiator pens to divert its people’s attention. The 1962 war with India was connected to the domestic problems Mao had after his disastrous Great Leap Forward. However, empire building is not so easy in an age of nuclear weapons and when your regional opponents are technologically superior. A key reason why defence budgets are rising in Asia is that governments are preparing for that possibility.
But what if the Chinese economy powers on for another few decades? China will then have a global profile more or less where the US was in the world system in the 1950s and 1960s. If it remains an autocratic system and couples this with the world’s largest economy and defence budget, then there will be reasons to be worried, especially if you are a neighbour with a number of unresolved disputes. India has clashed figuratively with China and will do so in the future over the Dalai Lama’s succession, the Belt Road Initiative and on the Doklam plateau. It should be no surprise that India’s strategic establishment is mooting the possibility of a re-energised Xi giving India a rabbit punch in the first half of next year.
When Xi first came to power, he said, “To forge iron, you must first become strong.” With the conclusion of the party congress it is evident he has become strong. He has also stated in vague terms, but more concretely in earlier State policy documents, what he wants to accomplish with all that power. The next five, maybe 10 or even 15 years, will show whether he can actually forge iron. Whether he does or does not will determine, to put it mildly, the future of the world.