Contrary to popular myth, China was not upset at the DPRK's accelerated nuclear and missile testing per se, but rather by its timing, as the counter-currents it set in motion - the deployment of anti-ballistic missile defences and the strengthening of US forces in the region, were not in keeping with China's own defence modernisation schedule. Doklam similarly was seen as a routine land grabbing exercise that went horribly wrong for China, exposing the unwillingness/inability to risk military action to protect negligible territorial gains because the long term costs: negating nuclear deterrence and catalysing an alliance against it, were too expensive to absorb. Doklam also provided a clear template for other countries to use in the face of incessant small scale land grabbing, in effect destroying decades of carefully crafted strategy. In short Xi has destroyed the two main pillars of China's long term dominance strategy in the space of 8 years.
His economic record is equally abysmal. He has presided over a slowing economy, with signs of stagnation in plain sight: China's infamous ghost cities, and the hidden issues like the massive non-performing asset problem of the public sector. Unimaginatively, his solution to these has been the very worst kind of failure reinforcing: One Belt One Road (OBOR). The assumption here is that infrastructure construction can overcome the lack of the other factors: entrepreneurship, labour, land, social structures, local capital, and financial viability. Apparently bridges and roads can overcome Pakistan's feudalism problem, its terror superstructures, military stranglehold of the economy, and its lack of an investment climate, while miraculously enabling Central Asia produce to become road-transport viable, which they patently are not. In many way's these ghost cities - badly thought out infrastructure problems are one of the key drivers of China's NPAs. Now Xi has a very good rationale for keeping growth state driven, Deng's brief flirtation with private ownership, having unleashed a vocal middle class that were the core of the Tiananmen Square protests. The problem is Xi is not moving to any sustainable model of PSU growth, but squandering China's vast currency reserves at demonstrable failures to keep the public contract dependent middle class loyal to the party. The worry is what happens when all these countries default on their payments to China? The answer is simple: look at Hambantota and Gawadar, both of which continue to leech money with no end in sight. In effect what Xi has ensured is short term loyalty to him, at the cost of expanding china's NPA problems regionally and well beyond its current assets or revenue generation potential.
In short what the 19th party conference achieved was a consolidation and celebration of failure, coerced through reign of terror. The problem with a cabinet of yes-men is that the probability of miscalculation on military matters in disproportionate. The real question is when will China's reserves run out and the unsustainability of Xi's OBOR-PSU charade start imposing real economic hardships on Chinese citizens? It is this point - the intersection of military miscalculation and tangible economic hardship for the average Chinese that India will have to prepare to meet Chinese misadventure.
Abhijit Iyer-Mitra is Senior Fellow at the Institute of Peace and Conflict Studies. He tweets as @Iyervval
Disclaimer: Views expressed are personal. They do not reflect the view/s of Business Standard.