October 5, 2018

If the Chinese model” of leadership was credited for the country’s post-1979 success, it must also be indicted for the present decline

For some strange reason, many people in the world believe that China’s leaders are astute but inscrutable strategists, with an unusual ability to both think long-term and do long-term. Why do I say strange? Well, look at the scorecard as it stands today.

This is an archived blog post from The Acorn on Medium.

First, from well before the global financial crisis of 2008, China had begun deliberately antagonising every single one of its large neighbours and bullying the smaller ones. This pushed countries from as far as North America, Australia, the Western Pacific and the Indian subcontinent together into a closer embrace. Now these happen to include the world’s strongest military, economic and technological powers.

Second, in the full knowledge that China owes its four-decade long prosperity to Deng Xiaoping’s reform ideas, its leadership has reversed course and is steadily heading Maowards. The liberalisation of business and society — and to some extent politics — that characterised the reform era are gone. More importantly, the normalisation of top leadership, succession and internal accountability have been thrown out in favour of a in-your-face personality cult. Disappearances — of politicians, businesspeople and even celebrity movie stars — have become so commonplace that they don’t even raise eyebrows anymore. This is the formula that dug China into a hole in the 20th century, and a civilisation that prizes its historical memories is not unaware of this. In the past few months, one extramural intellectual wrote a cathartic critique of Xi Jinping’s policies, while a handful of senior party officials are said to have signalled displeasure at their annual leadership retreat at Beidaihe this summer.

Third, whoever started it, China finds itself in an escalating trade war with the United States. You could argue that such a war hurts both parties, but the point is that China’s leaders have gotten their country into a situation where the United States has changed from being an avid supporter to a bristling antagonist. The trade war exacerbates military tensions that, as we saw, China’s leaders raised. Last week, a PLA Navy warship came close enough to be within collision range of a US Navy destroyer in the South China Sea. Those who think rattling sabres amid an escalating trade war is a sign of strategic acumen must sharply reduce their consumption of intoxicating substances.

Fourth, after brutally subduing Tibetans in past decade, China’s leaders are trying to do the same with the Uyghurs of Xinjiang. Beijing’s combination of sophisticated surveillance technology, intensive policing and a system of social control worked against the Tibetans, whose most violent form of protest was an occasional act of self-immolation. Whether it will work with the Uyghurs, who don’t share the Tibetan faith in non-violence, and share ethnic, geographic and religious links with neighbouring countries, remains to be seen. Furthermore, rejecting a grand compromise with the ageing Dalai Lama might prove to be an arrogant mistake in hindsight.

Finally, by putting all the country’s foreign relations eggs in one Belt and Road basket, China’s leaders now face a growing backlash against their projects. In the past few months, Pakistan, Myanmar, Sri Lanka, Malaysia, the Maldives, Nepal, Zambia and Greenland have pushed back against Chinese-debt funded projects. Australia, New Zealand, the United States and the European Union have raised their level of scrutiny of Chinese investments and technology flows. And why not? After Chinese government entities took possession of ports, airports and over 1000 sq km of disputed land in Sri Lanka, Zambia and Tajikistan respectively (because the countries couldn’t repay their debt), others are bound to be very cautious.

It is easy to attribute China’s current predicament to Xi Jinping’s policies, but he is merely amplifying the pre-existing thinking among the party elite. If the Chinese model” of leadership was credited for the country’s post-1979 success, it must also be indicted for decline and failings of the present time. Instead of looking at China’s leaders as some mystical Go-playing strategic geniuses, we are better served by treating them and the China model as ordinary.

China and its supreme leader have been forced onto the back foot this year not least because of the consequences of their own actions. They no doubt feel the economic pressure from the United States, greater military alignments oriented against them in the Indo-Pacific, growing spine among the smaller countries in the region and greater internal security risks from Xinjiang. Xi Jinping’s hold on power is untrammelled but he too has sensed that he could be vulnerable to dissent within the party leadership. The question now — for China and the rest of the world — is how will his regime respond?

If good sense prevails, China’s leaders will stand firm on a small number of core subjects and yield on electives. Yet, having stoked up tensions on issues like sovereignty over the South China Sea and the Himalayan borders, standing firm will mean further antagonism with the United States, Vietnam and India. On the other hand, if China appears flexible on these fronts, it will damage Xi’s personality cult, if not his hold on power. Yielding on the electives — say on the Belt and Road debt renegotiations — could quickly derail the initiative, leave Beijing holding tens of billions of dollars of bad debt and stranded assets, and hurt Xi’s personal standing.

What we’re witnessing is a Greek tragedy with Chinese characteristics for a new era. We can’t stay out of it, but we should try and limit the damage it causes us.

This appeared on my Asian Balance column in Business Standard today.

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