What Xi Jinping's hold on power in China means for India

Topics Xi Jinping

Xi Jinping. Photo: Reuters
Xi-Jinping has clearly consolidated his position as the single most powerful man in China's modern history, a feat so far only achieved by Mao Zedong and Deng Xiaoping. On one hand this is excellent news for India - for never has a man so incompetent as Xi taken over paramountcy in our single most potent adversary. On the other, it is clear that China is in a failure-reinforcing loop, having conferred so much power on someone who can charitably be described as a serial failure. However the results of such serial failure is increased revisionism in order to divert attention abroad, and India will in all probability be a prime target  for this unwanted attention. The question now is what will the contours of Xi's paramountcy be and what does it bode for India?

Those seeking to link Xi's strength to an unprecedented 3rd term as president or general secretary are patently wrong. Neither of these posts have consistently indicated whom true power in China lies with. Liu Shaoqi was effectively tortured to death by red guards while still serving as president of china in 1968, and General Secretary Zhao Ziyang was thrown into house arrest for going soft on Tiananmen Square protestors in 1989. Clearly then position is no gauge of power - the mind capture of the party cadres through sheer fear is. This is exactly what Xi achieved through his massive purges across all levels of the party and military and the clearest indicator of this mindspace capture is the enshrining of Xi thought along with that of Deng and Mao. The problem of such absolute mindspace capture  - surrounding yourself with yes men - is, you create a closed information loop - that filters out any bad news. While this is wonderful for public relations, it is terrible for policy. Signs of this have been clear for a long time with Xi's serial failures on the economy and diplomacy as well as his plans for the future. 

The most consistent of Xi's diplomatic failures has been the South China Sea (SCS) littoral, with North Korea and India being his most recent and spectacular. China's attempts at winning support for and neutralising opposition to its SCS expansionism, is driving more countries into the arms of the United States, in a way that they organically never would. A logical policy would be carrots and sticks - the issue is Xi's policy is saturated with sticks and the carrots are almost nonexistent. Even presidents like Duterte, who initially spurned the US have found no reassurance or rewards in their friendship with China and backpedalled. A simple survey of the major littoral navies surrounding China - Vietnam, Singapore, Malaysia, Brunei, Indonesia, Philippines, Australia, Japan and Korea, show a steady increase in tonnage, numbers and lethality as opposed to a decade back. If the former 7 have been spurred by the SCS imbroglio, then the latter 2 are mostly driven by North Korea. 

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.

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