‘Between the two Olympics, China has seen a fundamental shift in every sense,’ says Vijay Gokhale

From domestic politics to foreign policy, China has changed dramatically since 2008, says the former Foreign Secretary

February 02, 2022 09:05 pm | Updated 09:31 pm IST

Vijay Gokhale. File

Vijay Gokhale. File

Fourteen years after Beijing hosted the Olympics, the Chinese capital will, on February 4, launch the Winter Olympic Games in a grand opening ceremony. From 2008 to 2022, China has seen a huge shift in its domestic politics as well as in its relations with the world, says Vijay Gokhale , former Foreign Secretary and Ambassador to China. Excerpts from an interview.

Looking back to 2008, what legacy did the Beijing Olympics, as well as the global financial crisis which followed that year, leave on China and how it saw its place in the world?

The period between the two Olympics has seen a very fundamental shift in China in every sense. In 2008, when China held the Beijing Olympics, it reached the apogee of global respect. It had grown for 25 straight years with double-digit growth. It had majorly contributed to global trade and business. It had expanded diplomatic influence across the world in those 20, 25 years. And the Beijing Olympics were meant to be the crowning glory of that remarkable period of China’s growth.

Subsequently, after a very successful Olympic Games was held by them, in the global financial crisis, while the rest of the world faltered, China was able to keep the global engine ticking away because of the massive infusion of close to $1 trillion dollars in terms of structural adjustment support. As a result, the sense within China was that the 2008 Olympic Games were a coming of age. The global financial crisis only confirmed to them that this was not simply a passing phenomenon and that China’s position was going to go from strength to strength thereafter. It was during this period, therefore, that corresponding changes came in China’s foreign and national security policy, as well as in its general approach to international relations.

If you now cut to 2022 which is the year it is hosting the Winter Olympics, China is going into these Olympics with a greater sense of anxiety and with a sense that things may not be going as they would wish it to, both in terms of the domestic situation, because of the economic problems that are there, and internationally. Despite whatever it may tell itself, that it has been able to stand up to the rest of the world, it actually faces a global environment which is much more complicated, and in which China is not seen across the board as a positive contributor to the global situation.

So although China’s GDP is now almost double what it was in 2008 and its people are more prosperous than they were in 2008, perhaps the perception of China is not as positive as in 2008, both because people have put a question mark on whether China’s economic growth will continue to power global growth, and also whether China’s diplomatic and international behaviour helps in maintaining peace and security, or actually worsens the situation in the region.

We tend to look at 2012, when Xi Jinping became the General Secretary of the Communist Party, as another turning point. Given the post-2008 trends we had seen, do you think the changes in China, both at home and in its foreign policy, would have happened regardless of who was at the helm?

This does not have a simple answer. There is no doubt that by 2008-2009, alongside the remarkable achievements that China had made, elements of the darker side of the 20 years after the Tiananmen incident were also coming into the open. There was corruption on a vast scale. Within the party, power had fractured. Authority had flowed out from the Politburo and the Central Committee to the provinces. There was no central authoritarian figure to maintain control. Ideology seemed to have disappeared in the new China, where money was the principal determinant of power and, also, of governance.

Consequently, the party faced a dire challenge in that it was seeing the gap between the party and the people was widening. There was a real danger that the party might lose relevance in terms of ideology, in terms of its contact with the people. So there was a challenge. There is no doubt that in 2012, whichever leader was appointed as the General Secretary, the party would have had to deal with this. So to some extent, the answer to your question is yes, there is a correlation between the situation as it developed in China in the decade prior to 2012, and the manner in which the Chinese leadership acted post-2012.

But it is also true that individuals matter. President Xi Jinping has utilised this opportunity to consolidate his own personal authority. One may debate as to whether these twin problems of dealing with corruption and reconstructing the party had the unintended effect of strengthening President Xi, or whether President Xi’s personal ambitions were already there and he merely utilised these two problems to build upon that. This is an issue that can be debated ad nauseam.

The fact of the matter is that from 2012 to 2022, Xi Jinping has consolidated power like no leader since Mao Zedong. Today he is, as one article said, the chairman of everything. Therefore, while the circumstances in 2012 warranted some tough measures in order to make the party relevant to the people again, and to wipe out some of the evils of development, particularly corruption, which were affecting the party, there is no doubt that there has also been an enormous strengthening of the personal authority of the leader. We are in a situation where a central authoritarian figure is back at the centre of everything in China, not just its politics, but its society, military, international relations, and so on. It remains to be seen what the impact of this will be going forward.

One impact we have already seen on domestic politics is the move from collective leadership to, as you said, one man rule. What legacy will that have on political stability down the line, when they have done away with a system that enabled three relatively smooth transitions of power?

If you read the resolution on history which the Communist Party adopted in June 1980 after the end of the Cultural Revolution, one of the central elements of that resolution was that there had been a dangerous concentration of authority in the hands of one individual, Mao Zedong, as a result of which, that individual, namely Mao, made serious mistakes that caused great damage to the party. Therefore, it was necessary for the party to move away from the whole idea of the personality, and of the personality cult, into a situation where power was shared, where responsibility was shared, and where collective decision making was the order of the day. This resolution then became the basis for a change in the party’s political rules, which too were brought in 1981 by Deng Xiaoping.

The new set of rules emphasised two things. Firstly, there will be collective responsibility between the members of the Politburo Standing Committee which will be done under the principle of one man, one responsibility. In other words, rather than centralising all authority in the hands of a single leader, namely the General Secretary of the party, there would be individual members of the Politburo Standing Committee handling the economy, national security, law and order, propaganda, and so on. But the decisions on all these issues will be taken collectively. That was one critical decision.

The second critical decision that was taken was the cult of personality would be specifically forbidden, which included singing praises and lauding the accomplishments of leaders in an exaggerated fashion. There were very specific provisions on this. This therefore ensured that whatever was to the credit of the party went to the party, not to the credit of an individual. What has happened essentially in 2016 when the new political rules for the party members was introduced, is that both these critical elements of party political life have been either expressly removed, or so significantly diluted as to be rendered meaningless.

In other words, there is no mention of collective responsibility in terms of one man, one responsibility anymore. Between 2012 and 2022, all authority has been arrogated by President Xi Jinping, who is now the chairman of all the major commissions and the head of all the party central leading groups. Similarly, the personality cult has been emphasised by the fact that all achievements are attributed to President Xi Jinping. All policy, whether it is in the area of foreign policy or domestic policy, now emerges out of Xi Jinping Thought. To that extent, the provision which discouraged the personality cult, and which forbade the singing of praises of one leader or the attribution to him of all excellent outcomes, has disappeared. In fact, that is precisely what is being done now. So there has been a very fundamental shift in the basic behaviour within the party since 2012.

Is there a serious question mark now on the issue of succession and how that unfolds?

If you were to go on it purely on the basis of optics, one would conclude that the third term of President Xi is a foregone conclusion, because he is not only in complete command of the party, but he has also amended the State Constitution to allow him to serve as president for a third and potentially even a fourth term. However, I think we should not be swift in predicting what the outcome of the 20th Party Congress [later this year] will be. Whether President Xi will continue to hold all the three major levers of power, namely the Presidency of the People’s Republic of China, the General Secretaryship of the party and Chairmanship of the Central Military Commission, or not, still remains to be seen. That will depend on how he looks at succession planning. By the time the 21st Party Congress comes around [in 2027], President Xi will be in his mid-70s. While on the one hand, age is catching up with him, on the other hand, he will be expected to live for a good many years beyond that, just as his predecessors have. Therefore, he will need to put a succession in place which does not, in a sense, rebound on him. At this stage, I would not like to make a prediction on what the political arrangements beyond October or November 2022 look like, except to say that it will very much be determined by President Xi’s own preferences.

In this period, what changes do you see in how China looks at its place in the world and increasingly, as a shaper of the world order?

China has always practised balance of power politics. This started when they established the People’s Republic of China itself. Mao Zedong used the famous phrase, ‘we will lean towards the Soviet Union’, which was a way of saying that in the Cold War, in the competition between the superpowers, they will be leaning in one direction in order to maintain the balance and to see how the balance could be worked in their favour. Subsequently, through the Cold War and post-Cold War period, China has always played balance of power politics, in an effort to hide its own weaknesses and bide its time until it is sufficiently influential to shape that balance to its own will.

China perhaps saw this inflection point approaching around the time of the Beijing Olympics or just after that. The global financial crisis gave China the sense that the inflection point was there. And to my sense, COVID-19 has confirmed that view as far as the Chinese are concerned, not necessarily because they perceive themselves to be doing so well, but because they perceive others to have done so badly, particularly the current leaders of the global dispensation, which is the United States and its Western allies.

The phrase that President Xi and other members of the party have been using for at least the past three or four years has been that this is a once in a century situation, which has both great challenges and opportunities. In other words, they see this as a great opportunity to change things themselves on the ground, not just to catalyse things which are already happening but to fundamentally reorder things. It is this grand sort of dream which is driving China’s foreign policy. It is another matter whether, in fact, this is a once in a century situation. It is also a moot point as to whether China has aggregated the necessary authority and power to make fundamental changes to the global order. But it perceives this to be the case and is therefore pursuing that in international relations.

Now, have there been errors of judgement? I think there have. In some cases, they might have done things differently. But broadly it is very much in line with the approach that President Xi has charted out since he took office. That includes the whole idea of creating an alternative universe in terms of the Belt and Road, payment gateways, governing the Internet, alternative global positioning systems, alternative multilateral lending institutions, the “Made in China 2025” strategy which means China will lead in new industries like artificial intelligence, Internet of Things, or 5G.

How, in your view, have world perceptions of China shifted in this period?

That’s a very interesting question. If you were to read Western media today, you would come away with the impression that China’s image in the rest of the world has fundamentally changed for the worse and that the rest of the world has seen the face of Chinese assertiveness, and even perhaps the face of Chinese aggressive behaviour. That, however, is not the reality. The reality is that while some countries have been at the receiving end of China’s assertiveness and even of China’s aggression, and there are other countries in the Indo-Pacific region which have concerns about China and these concerns have certainly mounted over time, in the vast majority of countries of the world China still retains a more or less positive image.

That is because of two reasons. First, because for the first time in maybe two or three centuries, the rest of the world has an alternative source of capital, technology and equipment for which they were entirely dependent on the West, and for which they had to accept whatever terms the West laid out. Now, China can provide all these to other countries with lesser political strings attached. For most governments, because in the 21st century most governments need to deliver to the people that they govern, these instrumentalities are important for them. Therefore, China automatically becomes favourable to them because their own socio-economic objectives have to be achieved.

Secondly in the COVID situation, there is no doubt despite some of it being propaganda, that the Chinese have been able to dispatch assistance in broad terms far more effectively than the West has. In terms of perception, the West has been seen as selfish whereas the Chinese have been seen as more generous. There have been allegations that the Chinese have made money but the fact also remains they have sent vaccines, PPE kits, medicines, and in some cases, other forms of assistance such as delaying the repayment of loans or diluting the loans if they are sovereign government-backed loans for less developed or least developed countries. In contrast, the West has not allowed vaccine exports to any significant degree, and has even been parsimonious with other kinds of assistance.

While there is good reason to feel that China has, in a sense, revealed a darker side of itself, many countries may not entirely share the view either because they need the Chinese or because they feel the Chinese have come to their help when nobody else did. Now that includes, interestingly, the European Union. On the one hand, the Europeans have for some time been saying that China is both a partner and a rival, or a strategic competitor and a strategic partner. But, in fact, the changes in the transatlantic relationship have caused some amount of rethink as to what they mean when they define China as a rival. While we may not be clear what the Europeans mean as a rival because there are differences, what is clear is they do not look upon China as a rival in the way that the United States looks upon China as a rival. There is a difference between the American position on China and the European position on China.

Part of this is, of course, economics. The EU is hugely dependent in terms of both their exports as well as investment and technology relationships. In order to grow their own economies, China is essential to them. Part of this comes from the understanding that China is likely to remain as, if not the largest engine of growth after the United States, certainly one of the world’s two or three largest engines of growth for the next 10 to 20 years. Therefore, Europe’s economic fate, in a sense, is tied to the Chinese economy. Secondly, I think we also need to bear in mind the fact that there has been a sort of erosion of trust between the United States and the EU as a result of the Trump administration, and the Biden administration has not been able to significantly correct this bias. The current situation in Ukraine demonstrates that. The Europeans, particularly the Germans and the French, are in some way keen to talk to the Russians although they have deep concerns over Russian intentions in Eastern Europe. They are still keener to talk to the Russians to resolve the issue than the Americans are. For these reasons, the European position on China is not likely to be completely synchronised with the American position.

What about India’s views? Given the current state of relations, do you see the present shift away from looking at China as a big economic opportunity, as was the case up to even a few years ago, as a permanent one?

For many years now, it has become clearer and clearer that the primary areas of Chinese interest in the Indian economy were selling to the Indian market, which is China’s exports, and providing the wherewithal for building projects in India, or project exports. The latter is different from foreign direct investment, where a sum of Chinese money is invested in India and a greenfield or brownfield industry is raised. In the case of project exports, the financing is not Chinese; it could be Indian or from third sources. The Chinese are essentially providing the equipment, technology, and in some cases the labour force. These have been the two mainstays of Chinese economic activity with India. If you look at it, despite a positive climate that prevailed from roughly 2005 to 2017, very little direct Chinese investment came into India, even though there were sufficient opportunities for the Chinese to do that.

Conversely, Indian companies have found it very difficult to break into the Chinese market, because although on paper things are transparent, in fact, the regulatory mechanisms are very complex, whether it is the phytosanitary requirements for export of agricultural produce, or the regulations in place for pharmaceutical exports, or the indirect non-tariff barriers that the Chinese have erected for export of Indian software to China because Chinese entities have been told to buy locally.

It has taken a while for Indian manufacturers to understand that these barriers are the means by which China is denying Indian companies the opportunity to compete in this market. There has been a sort of double whammy. On the one hand, there is no inflow of Chinese capital into India. On the other hand, there is no access for Indian goods into China. Therefore, a political problem has been brewing for some years. For the Indian side, the huge trade deficit is not simply an economic issue or a commercial matter, it is a political problem.

The Chinese perhaps have been slow to realise this, and therefore, tardy in addressing it. Unless they now fundamentally address this issue, my sense is there will be limitations on the amount of business that we get done. By that, I do not mean to say that trade figures will precipitously drop, because the fact of the matter is that China supplies many of the intermediate and capital goods that India needs, because we have either stopped manufacturing them, such as active pharmaceutical ingredients, or we do not have the capacity to manufacture them in scale. Therefore, you might see Chinese exports to India holding steady or even growing until such time as the “Make in India” campaign really takes off.

But that will be the limit of economic activity. What you won’t see is significant amounts of Chinese investment, or for that matter, partnerships in terms of technology sharing or joint manufacturing, or a closer relationship between the renminbi and the rupee, or easier financial and banking channels, greater presence of Chinese and Indian banks in each other’s countries, all those indicators which suggest that the two economies are converging. I don’t expect to see this in the coming five to 10 years.

What of global convergences between India and China, which both sides seemed to emphasise previously but we now hear a lot less of, for instance on climate change or global trade?

There are a number of areas in which we share a common approach, and even common interests. On the other hand, the whole contention that before 2015, China saw the real possibility of partnership or cooperation with India on those topics is open to debate. When India and China in 2008 used the famous phrase that there is enough space in the Asia-Pacific for both India and China to grow together, we perhaps meant different things. Even this whole idea of growing together in a shared space was not based on convergent thinking as to what precisely it meant. On the other hand, post-2020, any possibility of collaboration has been set back even further, because as the Government of India has correctly said, we cannot on the one hand talk of cooperation and partnership where it suits China, but on the other hand, have a problem or confrontation in areas where it doesn’t suit China to collaborate. This is an entirely rational position that the Government of India has taken.

What shift do you see in China’s approach to territorial disputes, which now seem to be spoken more of as questions of sovereignty rather than issues to be negotiated?

If you look at the South China Sea issue, from the point when they offered to negotiate a code of conduct sometime in 2001 or 2002, it has taken them more than 20 years simply to come up with just a framework. As of now, there is no code of conduct. The only thing that has changed is the facts on the ground. And those changes have been made only by one of the parties to the dispute, which is the People’s Republic of China. The lesson we can draw from this is that they have entered into negotiations as a means of buying time in order to change the facts on the ground. And having changed the facts on the ground, they are now in a position to dictate terms simply because these facts cannot be reversed. They have then brought in a border law which legalises this by saying there is no dispute and this is a matter of sovereignty. There are lessons for us to draw from this.

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