By Deepender Hooda
The stand-off with China in Doklam is not about who blinks first, it is about a much broader game India has always been a part of. We need to understand what is motivating China in initiating these flare-ups and how we can protect Indian interest. The increasingly aggressive Chinese foreign policy is primarily driven by two factors: A build-up of nationalistic fervour in domestic politics and the Chinese economy’s hunger for new markets. Soon after taking over as the General Secretary of the Central Committee of the Communist Party of China, in 2012, Xi Jinping spoke of the “Chinese dream,” a term that, among other things, referred to national glory. Soon after he took over as the Chinese president in 2013, Xi undertook efforts to expand the Chinese footprint worldwide.
These “nationalistic” efforts have also resulted in sparking conflicts with inconvenient neighbours. Since 2014, we have seen a pattern: From the PRC’s escalating tensions with the Philippines and Vietnam in the South China Sea to increasing conflict with Japan over Senkaku Islands in the East China Sea, from the downturn in relations with South Korea over Seoul’s deployment of US THAAD (Terminal High Altitude Air Defence) to the tensions over Doklam. Interestingly, each time a conflict arises, the state-run Chinese media drums up patriotic war-rhetoric. A strong nationalist sentiment helps Xi consolidate and look beyond just the next term, which looks certain now. With five of the seven members of the Politburo Standing Committee set to retire at this year’s Congress, President Xi is looking to consolidate his hold by getting loyalists like Wang Huning into the PB.
Economically and geo-strategically, Xi’s “Chinese Dream” is manifesting itself in the “project of the century”, the One Belt One Road (OBOR) initiative. The project, announced in 2013, is estimated to cost around $900 billion. It aims to connect 60 per cent of the world’s population from China to Europe in a web of roads, high-speed rail, power lines, ports, pipelines and fiber-optic lines with the goal of stimulating growth in the scores of developing countries that lie en route. Its total estimated cost is less than a third of the $3 trillion foreign exchange reserves China holds and slightly less than the $1 trillion held in the US treasury bills. Apart from politics, there are hard economic compulsions driving OBOR. Unlike India, which remains a consumption-led economy, the Chinese economy has been largely driven by capital investments and exports, which together constitute about two-thirds of its GDP while domestic consumption accounts for the remaining one-third.
Since the global financial crisis of 2009, the Chinese economy is confronting the twin problems of falling global demand for its exports and an internal bubble of having invested into over-capacity. China realised that it could not continue to invest more domestically without this bubble bursting and that it couldn’t only rely on traditional world markets like the US/Eurozone with global demand failing to pick up. It needed new markets for its exports and for making investments, hence OBOR. It is not OBOR’s grandeur but rather the speed with which it is engulfing the entire Eurasia that is catching everyone by surprise.
Bangladesh signed up for OBOR in October 2016, Nepal in May 2017 and Sri Lanka, already a signatory to OBOR, signed the Hambantota port deal with China last month. The deal gives the Chinese 70 per cent stake in the port at an expected cost of $1.2 billion, but China does not have to pay anything as they have converted part of their $6 billion loan to Sri Lanka into equity. The Hambantota port is crucial to the Maritime Silk Road because it will connect China to Europe, via Mombasa in Kenya, and the Suez Canal to Europe and beyond. Pakistan, one of China’s close allies, is busy changing its Constitution by recognising the illegally occupied Indian territory of Gilgit Baltistan as its fifth province to facilitate OBOR projects. The China Pakistan Economic Corridor (CPEC), being expanded at a cost of $1.62 billion, is also part of OBOR, aiming to open up development possibilities in the landlocked western parts of China.
To our government’s credit, we have not played along with China on OBOR. This, as well as our growing strategic engagements with the US, has irked China which was looking for an easy “Ahmedabad jhoola” ride to further its strategic interest — sugarcoating it with some OBOR economic deals.
Even an angry China would not want a full-scale war with India because of the possible collateral consequences. However, it is also clear that it wants to keep India suitably engaged for at least three reasons: First, to provide steady fuel to domestic patriotic rhetoric; second, to put pressure on India to play ball on OBOR; and finally, to ensure we are not able to use our geo-strategic advantages to build a strong international alliance against global Chinese dominance, especially in view of our increasing strategic engagements with the US and Japan.
Not joining OBOR is not enough. Time has come to clearly spell out a broader strategy on China. Nothing in Sushma Swaraj’s statement in the Rajya Sabha in the first week of August indicated that the Narendra Modi government sees the big picture on China. In stark contrast to the BJP’s fierce political rhetoric on China during the 2014 election campaign, Sushmaji laid down the timeless virtues of “bhasha sayyam” in the Rajya Sabha. Is unilateral “bhasha sayyam” on Doklam standoff in the face of war-rhetoric by PRC an adequate response?
With the US distracted by domestic issues, Japan still reeling from stagflation, Russia hit by low oil prices and Eurozone engaged internally post-downturn with questions on Greece turmoil, immigrants and Brexit, the key question that remains unanswered is: Can the world afford to ignore a China looking to dominate a unipolar world? And can we?
Indian Express, August 14, 2017