Last week, China’s State Council tabled a 33-point plan to give a boost to an obviously tottering economy which has been impacted severely by the latest round of Covid outbreak in that country. Later, in a video conference hosted by Premier Li Keqiang and attended by over 100,000 government functionaries, it was made public that the economy had been hurt because of certain challenges and because of the Ukraine crisis. In last week’s rather unprecedented meeting, Li Keqiang admitted that the challenges “now were greater than when the pandemic hit hard in 2020”, according to an official release. From whatever information that has become public, the situation seems to be so dire that local governments are finding it hard to generate revenue and are being forced to take loans. According to news reports in April, more than 370 million people in Chinese cities contributing to 40% of China’s GDP were impacted by the outbreak. All of China’s economic indices are showing a downward trend. The 2020 outbreak was apparently controlled by the Chinese better, but with Omicron being more infectious, China has struggled to implement Xi Jinping’s zero-Covid policy—a policy that has been given up as an impossibility by the rest of the world. But Beijing is still insisting on mass testing and strict lockdowns, hurting businesses and disrupting supply chains, which may have an impact on the whole world.
But interestingly, all this economic hardship has not affected China’s imperial ambitions, as apparent from Foreign Minister Wang Yi’s tour of the Pacific Island Countries (PICs), where he tried to get 10 of these countries to sign the agreement, “China-Pacific Island Countries Five-Year Action Plan on Common Development (2022-2026)”. If signed, the agreement would have paved the way for China to make its security presence felt in the whole region under the guise of bringing Chinese-style “common development, common prosperity”. The agreement fell through on Monday, for lack of consensus on the part of the PICs, but that hasn’t stopped China from signing smaller bilateral agreements with individual island nations such as the Solomons. So, China has got more than a foothold in the PICs that are located thousands of kilometres away from the Chinese mainland, but are right next door to Australia and New Zealand. It’s almost like the Chinese building military bases at the Maldives, right next to India. As has been rightly pointed out by President David Panuelo of the Federated States of Micronesia (FSM), in a letter to other PIC leaders, “Chinese control over our security space, aside from impacts on our sovereignty, increases the chances of China getting into conflict with Australia, Japan, US and New Zealand, on the day when Beijing decides to invade Taiwan.”
This is prescient.
In this context, for some Indian analysts and policymakers to believe that China’s economic travails will halt its dream of world domination, is fallacious. As has been pointed out by some China observers that increasingly it is the Central Military Commission (CMC) that is channeling Xi Jinping’s foreign policy and aggression is very much a part of that policy. What Deng Xiaoping once said—“hide your strength, bide your time”—is history. Xi is over with biding his time. Ever since his rise on the Chinese firmament as general secretary of the Communist Party in 2012 and Chinese President in 2013, the malignant nature of China’s foreign policy has got more pronounced. And when a man like that thinks he is being cornered because of the negative fallouts of his policy, that he can no longer make economic prosperity a substitute for democracy—for various reasons—that the factions against him inside the CPC are getting more vocal against him, what are the chances of him trying to divert attention by trying to stoke nationalist fervour? Surely, it must be very high. Just Tuesday last week, Chinese and Russian fighter jets carried out a joint exercise near Japan even as the Quad leaders met in the Japanese capital Tokyo. Call it the Chinese-Russian way of sending a message to the free world. And all this at a time when the Quad is still a toddler and a potential security pact is nowhere on the horizon, and the US is tying itself up in knots on whether or not it should defend Taiwan in case there is an attack by the Chinese.
All the more reason the civilised world cannot let its guard down as these reports come about China’s economic distress.