China’s worldview, its postulates and a reality check

China might need to come up with an alternative theory of modernity if at all it hopes to beat the West’s free market concepts and beliefs, but the odds are stacked against it

Published - August 08, 2023 12:16 am IST

‘Beijing’s current economic prescriptions have led to serious reverses in recent years’

‘Beijing’s current economic prescriptions have led to serious reverses in recent years’ | Photo Credit: AFP

Chinese leaders, especially current paramount leader, Xi Jinping, constantly refer to ‘changes unseen in a Century’, implying that the decline of the West-promoted ‘rules based order’ is inevitable, and that a new Chinese-promoted world order is set to prevail. Implicit also is that a Chinese-driven world is better suited to a world defined by disorder, asymmetry and fragmentation.

‘Changes unseen in a Century’ is one of the underlying principles of ‘Xi Jinping Thought’. This presupposes that the struggle for future dominance revolves around not merely military security but also technological, cultural, as also biological aspects, and that given China’s rise, accelerated by technology and shaped by its economic strength and demographic potential, its success is inevitable.

U.S. as the main threat

The current crop of Chinese leaders believes that ongoing threats to China, however, remain and that the main threat comes from the United States. They hew to the view that growing polarisation within U.S. society and loss of power across the globe were impacting U.S. attitudes, causing aggravated tensions between the U.S. and China. In turn, it had led to a marked shift in U.S. attitudes; from an earlier policy of ‘engagement and partial containment’ to one of all-out competition with China, for global influence. The war in Ukraine, talk of an increasing divide between democracies and autocracies, the forging of new security partnerships such as the AUKUS (Australia, the United Kingdom and the U.S.) and the Quad ( Australia, India, Japan and the U.S.) were all symptoms of this malaise. China’s concerns had also increased that the Ukraine war could lead the U.S. to be more assertive on Taiwan. Beijing’s riposte has been to enlarge its Global Security Initiative (GDI) and further expand the China-led Shanghai Cooperation Organisation (SCO).

Chinese scholars further believe that the world has currently entered an era of ‘Polycentric Competition and Cooperation’. According to China, the U.S. was unprepared, however, for a shift of this nature, and already the consequences could be seen, as for instance, in West Asia. Here, as in many areas of U.S. dominance previously, China was displacing the U.S. The Iran-Saudi Arabia truce brought about at China’s initiative was an indication that U.S. influence here was on the wane and that China was gaining in strength in the regional and global sweepstakes.

China’s influence, in the meantime, had grown, according to Chinese sources, in quite a few international organisations such as the World Health Organization. It had also succeeded in binding as many countries as possible to Chinese systems, norms and standards. Another set of claims is that China had succeeded in having a decisive voice in various international standards setting bodies. Consequently, Chinese standards had become the staple for many countries and, together with its model of subsidised state capital, China was set to emerge triumphant.

Prescriptions and reverses

Leaving aside for the moment China’s worldview, and its theoretical postulates as formulated by Deng Xiaoping such as the ‘Four Modernizations’ (which paved the way for China’s emergence as an economic superstar), the reality that China confronts today appears somewhat different. The issue before China is not one of the decline of the U.S., as much as how China can possibly reproduce the mind-boggling growth of the first two decades of the current century — an over 800% increase in overall trade volume, an unimaginable increase in GDP, and the lifting of nearly 800 million Chinese people out of poverty. Policy prescriptions needed to maintain this kind of impetus and tempo of growth, are nowhere in evidence today.

In marked contrast, Beijing’s current economic prescriptions have led to serious reverses in recent years. Many of these policies stem from Mr. Xi’s efforts to provide safeguards for his more orthodox version of Communist philosophy as distinguished from a market-oriented policy, accompanied by a determination to increase governmental control in the economic realm, restrict private enterprise, and achieve greater rule by decree.

The COVID-19 pandemic which necessitated adoption of certain draconian measures, including an unprecedented three-year lockdown, has been responsible for a severe economic setback, apart from hardship for its people. Several laws enacted by Beijing to contain the pandemic have again adversely impacted the image of China in the eyes of the world. Many multinational concerns have, hence, preferred to leave China, being uncertain of what the future holds. Beijing’s crackdown on major technology companies and the real-estate sector have only added to the concerns of investors already grappling with the loss of several thousand millions of dollars in market value.

If China is to try and outdistance the U.S. in a period that Beijing itself affirms as featuring both Polycentric Competition and Cooperation, Beijing will need to make several shifts and changes in both approach and policy. However, the odds are stacked against China. China’s current GDP growth has declined to around 3%, while China will need to more than double this figure to ensure healthy growth. Employment risks have increased and lack of employment among youth is no longer a statistic but an aspect of grave concern. An ageing population adds to these concerns. Evidently, major shifts and changes in both approach and policies are called for, including a new economic model and an undertaking to raise wages and pursue other economic and structural reforms. What China needs to realise is that it might need to come up with an alternative theory of modernity, reducing the role of the state in promoting innovation so as to bolster the economy, if at all it hopes to beat the West’s free market concepts and beliefs.

The real question is whether China can indeed produce a model that can supplant the West’s so-called ‘rule based international order’ and create one better suited to a fragmented world order. In turn, much would also depend on whether the Chinese view that the West is disintegrating is true. The only purpose the war in Ukraine has served is to demonstrate that when ‘push comes to shove’, a disunited West can rally its forces under U.S. auspices and effectively checkmate Russia. It could be seen as a vivid demonstration of the superiority of ‘free will’ over ‘managed systems’.

China is, no doubt, contemplating putting in place certain corrective steps. Beijing’s decision to appoint an acknowledged economist with a proven record as Governor of the Peoples’ Bank of China, can be expected to boost global confidence in China’s banking sector. It could be a steadying influence during a period of uncertainty and might have a favourable impact. The new Chinese Premier, Li Qiang, is again apparently making serious efforts to reinvigorate the private sector, but it is uncertain whether he would go so far as to convert China into a multi-oriented economy which satisfies the international business community. All this is still history in the making.

On Taiwan

The issue of Taiwan, like Banquo’s ghost, also hovers over the scene. Notwithstanding current tensions and despite sabre-rattling by both sides, it would seem that a major conflict on the lines of the Ukraine conflict — one that could impact both the fortunes of China and much of the world in the Asia-Pacific region — is not yet on the anvil. Any such conflict would have a severe and deleterious impact on the global economy. Notwithstanding this, neither the U.S. nor China can possibly step back from the issue of Taiwan. One possible scenario is that it might induce more realistic efforts to define objectives of which Taiwan is merely a symbol. Strategic commentators believe that Taiwan is only one of several areas where China and the U.S. will find themselves in conflict in the coming period. Finding common ground at this time would be important to ensure that matters do not go out of control.

M.K. Narayanan is a former Director, Intelligence Bureau, a former National Security Adviser, and a former Governor of West Bengal

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