The Self-containment of China

By Lt Gen P R Shankar (R)

A rising China had begun shaping the twenty-first century, much as the U.S. shaped the twentieth century. As Xi Jinping consolidated power, he started speaking of “great changes unseen in a century” and “revenge on the century of humiliation”.

Published in The Financial Express @ https://www.financialexpress.com/world-news/the-self-containment-of-china/3098468/

Why is China talking of “four fronts” these days? A GDP obsessed nation is now almost eschewing its economic growth. Why so?  It is all about self-containment. To understand this, one has to hark back to the turn of the century when it was felt that the weight of global power would shift to the East. It started coming true after the 2007-2008 global financial crisis. Many felt that the world was witnessing the beginning of a changing world order. It was widely believed  that this change was being scripted by China’s “long game” and “distant vision”. A rising China had begun shaping the twenty-first century, much as the U.S. shaped the twentieth century. As Xi Jinping consolidated power, he started speaking of  “great changes unseen in a century” and “revenge on the century of humiliation”. Analysts started outlining “strategic adjustments” driven by “unprecedented geopolitical and technological shifts”. Debates were on how the world would adjust to China’s unstoppable rise and growing power as against USA’s relative decline. The combined West was seen to be in a self-degeneration mode.Advertisements

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China was steadily using its rising power to enforce its prescribed consensus with everyone it dealt with. It established legitimacy through a mixture of coercion, threats, inducements, or lawfare.  The power of China’s famed “salami slicing” tactics and its constant ability to change status quo in its favour became legion. At that time, China’s expansionist power was being underwritten by a booming economy, influential and crafty diplomacy and a fast modernising  military. The world was China’s oyster and Xi Jinping was wearing its pearl with pride. 

As with all things, an action begets a reaction and “Containment of China” began. The basic idea of containing China was to limit its expansion. However in reality, the US efforts at surrounding China with a network of alliances, military bases, and economic partnerships, were actually falling apart. The balance of power in the Asia Pacific region was decidedly shifting China’s way once it took control of the South China Sea through its artificially built Islands. China was well on its way to achieve regional dominance. The  BRI was unleashed  globally. The driving force it generated started tipping the balance of power towards China.  

China’s rise continued unabated as Xi Jinping settled into his second term (2018-2023). The sceptre of a Chinese led world order was looming large as Xi Jinping made his moves to continue in power for an unprecedented third term in the period. He was being hailed as the new helmsman of China who would rejuvenate the Chinese nation and realise its dream. China’s dream run continued till the first half of the pandemic period ending 2021. It was the pinnacle of Chinese power. In this run up to the pinnacle a few hard realities surfaced.  Earlier, as Xi ascended to power in 2013, the CCP had felt that China was veering away from its core principles. Too much wealth and privatisation and its attendant corruption posed a threat to its grip on the country.  Xi had to yank hard left and steer China on a revisionist path of the Marx/Mao variety of communism where the state was supreme. His anti-corruption campaign, an internal reform drive and the inherent structural fault lines of the Chinese economy resulted in a steady slowdown of  China’s GDP growth rates. The first nail of self-containment was in evidence.  While it was not significant, it laid the base for what was to follow during the pandemic period (2020-2022). 

China was the first country to stabilise when the pandemic hit all of us broadside in 2020. It saw a great opportunity. Its economy had a steep upwards spike when the rest of the world was sharply contracting. Its autocratic form of government seemed more suited to control the virus than democracies which were seen as weak. When everyone was preoccupied with battling the virus, Xi Jinping sensed a strategic opportunity and China became assertive. It gobbled up Hong Kong through multiple salami slices. It displayed military aggression in the South China Sea and along the LAC with India. it unleashed wolf warrior diplomacy against the rest of the world. Many of the BRI countries realised that they were ensnared in a debt trap. In comparison, a virus stricken USA was seen to be weakening and ineffective. In  Xi Jinping’s  view, China had arrived and was all set to realise the Chinese Dream. However it also sent ripples of alarm in many countries. The result was that the QUAD came into play. The second nail in China’s self-containment veil had appeared.    

Throughout 2020-21, mask and vaccine diplomacy were at the forefront of China’s bid to establish a Sino centric world order as others were floundering against the Virus. China was mocking at the world. However, at this juncture, Chinese technology failed China.  Its vaccines turned out to be duds. Xi refused to import better vaccines lest he lost “face”. It forced Xi Jinping and the CCP to establish a harsh “Zero Covid” regime to protect the Chinese people who were vulnerable to the Virus. Extensive lockdowns, movement control, isolation, testing and tracing procedures to keep the virus at bay meant a breakdown in supply chains and manufacturing networks. The economy started wallowing as the duration of the “Zero Covid” regime kept getting extended. Exports were hit and job losses mounted. Simultaneously China was going through an internal structural reform through Xi Jinping’s “state control, dual circulation and common prosperity” ideas. Private sector which represented a threat to the CCP was culled. The prosperous edtech and fintech were emasculated in 2021-22. The heavily indebted real state sector which was a mainstay of China’s economy went into bubble zone in 2022. The fizzle and vibrancy of the Chinese economy went flat. The Chinese economy started haemorrhaging. The third nail of self-containment was being hammered in.

Soon after Xi Jinping began his second term (in 2018), he had started plotting his way to get an unprecedented third term and anoint himself as the core leader of China at par with Mao and Deng. To achieve that, he had to spend considerable political resources on side-lining his opposition as also picking up his team of loyalist and lackeys. It also meant that he had to be cautious. He became risk averse. Simultaneously he had to show bluster to the outside world that he was a great international statesman. All this was happening when the Delta and Omicron variants were at their infectious best.  At this time Nancy Pelosi decided to make her presence felt in Taiwan. It provoked Xi Jinping into irrationality and made China blow a fuse. China undertook a punitive military show against  Taiwan. It was designed to be  a fire and fury display of missile firing and extensive naval and air manoeuvres. While this military demonstration conveyed a message to Taiwan, it posited a threat to all nations in the first Island Chain. If Taiwan went down, it could be their turn next. All of them – Japan, South Korea, Philippines, Vietnam, Malaysia and Indonesia started arming themselves and creating strategic interdependencies on each other. It forced USA to return to the region and establish bases in Philippines. When seen holistically, the combined enhancement of military capability in the region was directed against China. The fourth nail of self-containment appeared.     

When some of these events were yet to happen, Xi Jinping entered into a “no limits friendship” with Putin just prior to the Beijing Winter Olympics Feb 2022. Soon after that Russia invaded Ukraine. Ever since then, China has been seen with suspicion that it is providing military assistance to Russia. Combined with all other happenings outlined above, the West and significantly the EU, declared China as a ‘systemic threat’ and went into a technology denial regime. Investments also dwindled. The Ukraine war also spiked inflation in the West and dented its purchasing capacity. In turn, it squeezed the already dwindling exports from China. Empty  containers kept piling up at Chinese ports as their prices dropped significantly. Downstream effect was on factory closure, pay cuts and job losses. The combined upstream effect was friend-shoring/ decoupling/de-risking away from China. The fifth nail of self-containment started going deeper. 

In Oct 2022, the 20^th Party Congress anointment of Xi Jinping as China’s leader for the third term was an international spectacle. However soon after that, the Chinese people , who were in a pressure cooker situation provided a competing spectacle by staging widespread protests against Zero-Covid. It forced Xi Jinping to abandon his policy overnight. Resultantly,  China had a hard landing in 2023 as it re-opened to the world. However the world was no more enamoured to return to China in a hurry and has not done so as yet. The people in China have also become far more restive than before.  All this has forced Xi Jinping to be wary of colour revolutions and declare that “dark clouds are on the horizon” with “black swans and gray rhinos” everywhere. He started a security overdrive of China through unprecedented budgets for internal and external security. As China has become a state in which security overrides economy, its self-containment is becoming tighter. The biggest factor in the self-containment of China is its declining demography. The numbers and metrics of an aging nation are mathematical realities and cannot be swept away through political polemics. 

Despite all this,  one might argue that all this is pure fantasy in the light of Xi Jinping striding the global landscape posing as a colossus. Ostensibly, his diplomatic overdrive to attain a global statesman status belies any sense of self containment.  How is China contained when a slew of next-gen technologies are flowing out of the barrel of China’s gun?  The answers for these questions lie in a fundamental fact. A global power has to successfully dominate its regional sphere before it ventures out. Examine this factor closely. In 2019, Chinese presence was becoming globally ubiquitous and all set to dominate the world. However all of a sudden the internal talks in China is that it is confronting “four fronts”. The first front is across Taiwan Strait where it has to face forces of US , Japan and Taiwan. The second front is across the Korean Peninsula where American and South Korean forces confront it. It envisages a third front in the South China Sea and South Pacific against America and Australia. The fourth front is naturally across Tibet with  India. The spectre of USA controlling the Malacca Strait haunts them. Most international strategists spoke of China being put into a two front situation. Lo and behold, the Chinese have stacked four fronts against themselves. More than that, they are now re-evaluating the hype of taking Taiwan by force. Very surely they are self-contained.  

However there is a need to look beyond the military angle into the economy. To spur the slowing economy, China must get foreign investors into the game. Hence it needs to mend its fences with the West. But Xi Jinping, perceives threats from the West. He feels he must insulate China and bolster its national security to shield it from  western ideology. In  particular he sees democracy as pure poison. The competing tension between Xi’s distrust of the larger world and the need to maintain links with them to propel China’s growth is titling towards prioritisation of security. In this paradigm security seems to trump development with aging China as the loser. It is an ideal example of self-containment. Further,  many Chinese consider Putin and his  Ukraine sojourn as a “a bad example”. They fear that if China fails to quickly take Taiwan by force and instead gets mired in a Ukraine like situation, its “Rejuvenation” is at risk and the “China Dream” remains distant. Apart from the ignominy, any conflict with Taiwan carries the grave risk of stone walling investment by  foreign companies expanding into China. In addition it could trigger an outflow of Chinese assets abroad. The effect on China’s economy could be crippling.

There is a larger view which is emerging. China is seen to have more of an economic agenda and is not incapable of an international peace keeping or military role. Xi’s security, development and civilisational Initiatives have no takers since they are vague. Any promise they carry seems to benefit China only. Further , the feeling is that China will not “do the right thing” to uphold global peace, since it is not only party to many disputes but is its main instigator. As China remains embroiled in its disputes around itself and it walls itself in with Xi’s security agenda its self-containment will endure. That is the bottom line.