CHINA : A FIRE-BREATHING DRAGON OR A SICK LIZARD?

Articles which substantiate this analysisCurrent Revisionism in China The Chinese Wobble 

China is bellicose and militaristic  towards India and Taiwan. The hurry to usurp Taiwan is  palpable.  Massive air violations and amphibious exercises. Xi Jinping’s  speech on the eve of the Taiwanese National Day, exhorted it to peacefully unite with the motherland or else…  Even a time line is being discussed for its conquest based on assessed PLA capability – 2025. Once Taiwan is conquered, mainland China is militarily untouchable, it gets unfettered access to blue waters to ascend the superpower pedestal. It also lays hands on elusive semiconductor technology. Against India –  border violations, firepower displays  and tank drills near the LAC. Its stone walling in military talks reveals a persistent belligerence. All to subdue India. Subduing India militarily ensures that its long term competitor is kept down and its territorial integrity is protected especially in Tibet and Xinjiang. All part of rejuvenation of the China Dream. Right? Not exactly. The real answer as always in China is to search for the political motive. 

The fundamental  political motive of the CCP and Xi Jinping is to stay in power for life. Some time back I had sensed that CCP and Xi will endeavour to  stay in power in China which is not a superpower rather than being out of power in superpower China. Rejuvenation, superpower status, world domination are later day stories. The real deal is people – their protection, prosperity , destiny and the power to rule them.  For some time I could not connect the dots. Two headlines in SCMP connected the dots. The first headline read ‘Chinese county’s plan to solve marriage crisis by pressuring women into marrying single rural men backfires’. The second one read ‘India made unreasonable demands, says China, after border talks fail’. How do these connect? A political integration of Chinese demography, brings you to belligerence on its borders. Start at the tangent with demography, link it with the politics, see through the revisionist prism to arrive at the normal on the LAC. It gives a completely different meaning to the way we must approach China hereafter. We  can then decide whether China is a fire eating dragon or a skewed lizard. 

When the ‘one child policy’ was introduced in the early 70s, the precept was, lesser children and smaller population will lead to progress and prosperity. This was the political opiate to control and rule the masses. Population was controlled through draconian measures including forced abortions. For five decades, this mantra ensured that  China progressed beyond imagination. The negative shoots started sprouting early in this century. However political expediency, heady growth, increasing international clout, improving lifestyles and prosperity buried the problem. Revising the one child policy to a two child policy in 2016 did not make any effect since its implementation was cosmetic. China hid behind its great firewall,  stole technology and established international dependency on its manufacturing machinery while  its competitors were exhausting themselves in wars of no consequence. China was on track to get rich before getting old despite its economy slowing down off late. Then the virus stuck. The Chinese economy turned from being aided to opposed internationally. The census data released in May 2021, revealed that Chinese  demographics are now unmanageable and irreversible. Meanwhile  icons of economic growth started to challenge the state authority as inequality widened. China now faces the risk of social instability which will result in the CCP being out of power. Hence a drastic revisionism is underway which I have outlined in an earlier article. To put the cart before the horse; military bellicosity is part of the revisionism which in turn is a fix for demography induced instability. More of that later. First to the demographic bomb. 

As China kept reaping the demographic dividend,  it has become a ‘one child’ Nation with a ‘one child’ Army. In  2016, China introduced a two-child limit. However, birth rates did not rise due to high costs of housing, raising children and education as also lack of job protection for women. As China developed, fertility rates kept dropping. The current fertility rate of 1.3, is well below the replacement rate. Further women chose to pursue  education and jobs rather than to start a family. Societal affluence led to reduction in marriages and increased divorce rates.  Preference  for male children led to abandonment of girl children,  abortions and  female infanticide. The one-child policy resulted in a severe gender imbalance. At the other end, modern medicine enhanced lifespans. The  aged population has increased. Overall, the population was decreasing and getting older. The Chinese authorities, all the while, were cooking up and hiding all their figures.

The problem surfaced  internationally in 2017-19, when researchers felt that China’s population was well below its official 1.4 billion. As per estimates India would overtake China’s population in 2019/2020. That might have happened already. These researchers went into details of school enrolment, household registration and other details to come to their figures. The  Chinese census figures were kept a secret and declassified after some delay earlier this year.  Analyses indicated that Chinese counties were inflating population figures since long to garner a larger share of central funding. Overall China’s population figures were therefore inflated. In actuality, the population may be somewhere in between the official 1.4 billion and the researched 1.28 billion. A new study now says has that Chinese population will halve in the next 45 years. The truth is coming out incrementally to confirm that China is in decline. This is also evident in the uncoordinated panic responses in China – introduction of a three child policy despite the failure of two child policy, banning abortions, forcing unmarried urban women to migrate to rural areas and forcing marriages. Most of the measures are backfiring and stirring social unrest. In 2020 alone, marriages have declined by 12%, births are set to drop by 17-20% and 14 % of the population in 149 cities are aged 65 and over.  China has more seniors than young people . The proportion of over-60s is over 18 %  and  children make up about 17%  of the population. Its  working age (and military age) population is shrinking. From here on, work force will reduce, labour cost will increase  and consumption will reduce and the aged will increase at a much faster rate. The problem is assuming a real and tangible definition.

In this scenario the Virus struck to upset the Chinese applecart as mentioned earlier. It is here to stay in China and depress its economy. Despite all hype about the Chinese economy, the jobs market is badly hit. SCMP has published a series of six articles in 2020 and 2021 separately to highlight job scarcity. The Virus has also turned rich and developed nations away from China. They are actively seeking to reduce dependency on China beyond a point. Many of them have gone into a technology denial regime. 

Now the political angle. The CCP invented the one child policy to make China great. That very policy is now a cause for its decline. The effect of the one child policy will not vanish. The CCP has to offset this political disaster to stay in power. Ideally lesser population is good for China. Lesser pressure on resources, lesser pollution and  better lifestyles. However that means a smaller economy, and giving up the Rejuvenation Dream kick started by Deng. It will not put Xi in a higher  mausoleum than Mao’s. China has to be the world’s greatest power between middle kingdom and  heaven. The only way to beat the demographic problem and achieve world domination is to externalise China’s economy and use technology to leverage growth. China needs to grow rich before growing old. It has to beat the time line of decline (which in my opinion will start showing up in a couple of years). Part of the decline management is to ensure pensions for aged, health care for children, young mothers  and the aged, jobs for the existing population, affordable housing for all etc etc. The demographic bomb has demanded a radical rethink of everything from labour, health, education, technology, pensions policies, care for the elderly and much more. All this costs money which China clearly does not have. So what does it do ? It undertakes a revisionist exercise to switch from state sponsored capitalism to ‘Common Prosperity’.  Money from the rich is given to the poor Robin Hood style. The populist theme is to  make education affordable, ensure pension funding, provide health care, curtail high lifestyles, ban gaming et al. China is also reforming the debt fuelled housing sector, banking , so on and so forth. In this process the economy is taking a hit. So be it. China is ensuring that its masses remain opiated  with the sops of common prosperity. The CCP must be the saviour of the people once again and ensure that they are prosperous.  Xi Jinping and his cohorts have a plan. Whether it will work or not is another matter but China’s economy will slow down.  

Economic slowdowns generally generate domestic unrest. The chances are greater in China’s skewed demography – deeply aged,  increasingly unmarried and masculinized. Further, no nation can be prosperous and strong  with a sub-replacement birth rate and declining population. Only nationalism can offset this. This is precisely what Xi Jinping did on 31 July. He hailed the party’s successes and progress toward building a ‘prosperous, strong’ nation, stated that “the time when the Chinese nation could be bullied and abused by others was gone forever”, called  for a ‘historic mission’ of unification with Taiwan and warned that China would not listen to “sanctimonious preaching” and whoever attempts coercion , ‘will surely break their heads on the steel Great Wall built with the blood and flesh of 1.4 billion of Chinese people’.  High octane nationalism  has been the feature of all his subsequent speeches and that of important party members and mouthpieces.  China’s masculinized population is being externalised so that it it does not challenge the CCP  during the oncoming slowdown. China will resort to  ‘debt trapping’ nations , diplomatic wolf warriorism and flexing military might to  ride the tigers of domestic instability and economic decline. China is killing many  birds with one stone. It will seize a greater share of international power through use of force to appear strong. It will not appear to be weak or unsuccessful at any stage in this period. However there is one bird which is still fluttering. It is called power struggle. It always accompanies societal change in authoritarian systems. So watch out for purges and revolutions.   

The logic of Xi Jinping preponing all geopolitical time lines lies in its declining demography. In reality the timelines will be tighter. Capturing Taiwan by 2025 makes a lot of military sense in this context. Beyond that, it might be beyond China . Simply because  societies with aging populations have economic and political compulsions which turn them away from militarized adventures.  Young workers have to support aging citizens rather than meet  military requirements. The transformation of a militaristic young Japan into a pacifist aged society  is a live and stark example. China is aging faster than Japan and is a lot less richer at an equivalent stage.

The net effect is that China is on a tight time line to achieve greatness which it cannot,  but will attempt to do so. It has a three point agenda to achieve greatness. Capturing Taiwan. Besting USA. Subduing India. All this will be done militarily with diplomacy and economy in support. China will be more oriented externally and will mask its internal issues even more fiercely. That gives us a clear idea as to how to deal with it.  India needs to ensure that China internalises. That can be achieved through Tibet, Xinjiang and by focusing on demographic fault lines which will soon develop. This needs a great degree of influence ops to instigate mind games. Militarily, we must hold China on the LAC and ward off its aggression. This can be done on a standalone basis or in conjunction with other strategic partners. Our defensive outlook should switch to an offensive one as China declines. Plan for that. India should also ensure that Taiwan does not fall. Military turbulence in the days ahead is guaranteed. Prepare to deal with more face offs through pro quid quo’s. However, the greater opportunity lies in economic competition and denial. Denial will be the endeavour to decrease overall trade with China. Competition will be to draw trade away from China. Finally, we might treat China as a  fire breathing dragon presently. In the long term, we need to start thinking of China as a sick lizard ,