We have been witness to some shocking turns of events in our lifetime which I doubt any generations near us would have ever seen. We have now also seen havoc unleashed by an unseen, possibly man-made virus, and the wheels of the economy coming to a halt by circuit breakers, which we also refer to as a lockdown. A vaccine was a way out and all like-minded people and countries trying to survive the storm got together, but some rogue regimes thought this as an opportunity for territorial expansionism.
Things get complex when you have a rogue duo to handle in the middle of a pandemic. We have seen heightened tensions on the LAC and a super hot LoC with 4,646 ceasefire violations from Pakistan, the highest so far in the history of the two nations, precisely 11 times more than last year. Meanwhile, Galwan has permanently changed the history and paradigm of relations between India and China. We salute our fallen brothers who defended every inch of our motherland fearlessly and made the rouge expansionist hide its tail between its legs and run away, of course with 135 of their army dead, as per inputs from intelligence agencies. It had been a well-planned attack in deceit and treachery and back-stabbing, and, if I may say, done without any reluctance. But the outcome was a shattering of the myth of the Great Wall, the sinking of the unsinkable Titanic, the invincible falling apart like a house of cards, along with its hard-cultivated perception, which is their most potent weapon.
The stand-off continues and war formations change. The dimensions now pertain to perception, information and psychological warfare. Military-wise, they have lost the count of their dead and live with a compulsion to hide the number of dead soldiers like the number of deaths caused by the virus. Perceptions are weakening further as the world starts to rally behind India. The US is moving its armada to the South China Sea which is their Achilles’ heel. It runs 3.5 trillion of their trade and 90% of energy supplies are routed through the Straits of Malacca. A naval blockade would mean no oxygen to an already suffocating Chinese economy which is looming under 45 trillion dollars of debt, the highest in the world and a whopping 320 percent of their GDP and approximately 60% of the global GDP. Let’s also remember the US’s stern message sent to Beijing by setting sail on the Straits of Taiwan, challenging its might and will to act.
President Trump had already chocked China’s cash flows, and rightly so. With a $600 billion trade deficit, this was another blow. Their 5G dreams started turning sour too when the world called out their bluff. PM Modi in his vision and intellect delivered the body blow by banning Chinese apps, which means revenue lost, valuations lost, lots of big VC from PRC in survival crises and losing access to the jackpot–all the metadata those apps were generating which could have been used to weaponize AI and propagate the CCP’s agenda. This also means that the PRC can never ever be an AI superpower. With 5G out of the door, they can now kiss goodbye to the IoT business as well. Incidentally, IoT-based businesses are going to control 25 percent of the global GDP in the next 20 years, as per reports from leading consulting companies around the world. Hence, the Chinese dream of becoming a technology superpower is now history.
Rising unemployment and ghost cities also mean lost currency and goodwill. With no takers for Chinese vaccines, General Secretary Xi Jinping has nothing to take home.
Meanwhile, India in a daring attempt takes care of the Kailash Range which dominates the Penso Lake, making the Chinese’s aggression as a badly conceived idea.
The Himalayan ranges are being dominated by India, Taiwan has been secured and the South China Sea chocked, coupled with a non-functional Gwadar Port with a lot of resistance and armed attacks by locals and Imran Khan Niazi on his toes because of a failing economy and complicated political issues. All this has put China in a “chakravyuh” with no economic targets announced for 2021, which has never happened since 1990. 85% of small businesses are on the risk of being shut down in the next three years. The PCAOB implemented by Trump also knocked down hundreds of Chinese companies from the US Stock Exchange for good.
It seems like China has been dealt with a trail of blows and hits from all sides, from military perception, information warfare, trust and goodwill, energy, exports, debts and technology acceptance, to, last but never the least, the economy overall.
This answers the question why the Chinese had to retreat 8 km on the LAC for the first time after 1999 and why the vessel state of Pakistan requested for a ceasefire along the LoC.
War is an expensive business and as there is nothing hidden. With a billion dollars in reserve, a country should better save it to feed hungry children and secure vaccines rather than use it for bullets and mortars. Geopolitics is never straightforward, as I always say, and macroeconomics always impacts global politics.