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OP-ED: China versus the world

  • Published at 10:57 am September 5th, 2020
China Germany EU
Photo: REUTERS

The world may not want China, but it seems that it may very well need it

With the surrender of Nazi Germany in May 1945, marking the end of World War II, the United States of America emerged as a super power only to be challenged by the then Soviet Union, another superpower. 

In 1949, the Soviets successfully tested their first nuclear device thus ending the American monopoly on the atomic bomb. The Soviet Union finally collapsed in late 1991 which concluded the Cold War and the US apparently acquired the mantle of global leadership. 

Since then, the US with their treaty allies and security partners have advanced in global trade, science, healthcare, education, and defense and steered the whole world with invincible authority. Effectively, America has defined the new world order. 

A newer world order

The Covid-19 pandemic has appeared as the biggest global challenge since World War II. It has claimed more than 800,000 lives worldwide in the last seven months with more than 24 million people affected. 

Countries around the globe are grappling with serious health and economic crises. When a concerted effort to develop a vaccine is required, we are instead facing heightening geopolitical rivalries which could potentially threaten the existing world order. 

The Sino-American rivalry and tension which were quite discernible in the pre-pandemic period have deepened and accelerated in this difficult time. 

Although the virus had originated in China, America is the one which hitherto has paid the highest toll. China is becoming more assertive while America is becoming increasingly self-absorbed as the virus wrecks havoc on its public health and economy ahead of the presidential election due in November. 

The conventional perception was that China would at best pursue an expanded regional hegemony, implying a reduced US role, but would defer any global ambition to the distant future. But China’s preparation and willingness to challenge America’s global leadership is ubiquitous.    

The Sino-American conflict

The world has already seen an escalating Sino-American trade row, with sanctions and counter-sanctions in the pre-pandemic period. Since China is the world’s factory and import from China effectively halted due to the coronavirus outbreak in the first quarter of this year, Europe and the US have realized the peril of a centralized supply chain. 

Hence, their decision to reduce reliance on China was not only about decentralizing the  global supply chain but also a move to curb the rising trade and geopolitical influence of China. 

President Trump openly accused China for the global outbreak of the virus. Also, China’s reluctance in the first place and lack of opacity in an independent and thorough investigation on the origin of the virus has helped spread manifold conspiracy theories. 

While most of the world is hitherto struggling to contain the spread of the virus, China has greatly recovered and its economy is back on its feet again. 

In July, the US authorities tersely ordered China to shut down its consulate in Houston, accusing diplomats of aiding economic espionage and the attempted effort to steal trade secrets. 

The Chinese government also responded in kind by ordering the US to close its consulate in the southwestern city of Chengdu. 

In a more recent move in August, the Trump administration banned any US transactions with Chinese-owned TikTok and WeChat, allegedly in a bid to protect national security. 

President Trump presented ByteDance, TikTok’s parent company, a deadline of September 15, either to sell its US operations to Microsoft or another US company or face an outright ban. 

Of late, the Trump administration has also tightened the embargo on Huawei through an edict which will prevent anyone from supplying semiconductors to Huawei if they are produced using US technology. Since then, ties between the two countries are apparently at a free fall.

Enter India

In June, China locked itself in a tussle with India over an age-old border dispute at a time when the onslaught of coronavirus has brought India to its knees. Some 20 Indian troops were killed in a fierce brawl and dozens were believed to have been captured. Beijing did not disclose any casualties. 

From the Himalayas to the South China Sea, China is increasingly flexing its diplomatic and military muscle. India’s warming rapport with the US has been an irritation for China. Perhaps to avenge the assault in Galwan valley, India is making hastened effort to reduce its over-dependence on China by checking the sectors exposed or vulnerable to direct and indirect Chinese state influence. 

According to a Bloomberg report, the Indian government is reviewing 54 memoranda of understanding signed between educational institutions including the Indian Institutes of Technology, Banaras Hindu University, Jawaharlal Nehru University, and others with links to the official Chinese language training office, known as Hanban, which runs Confucius Institutes across the world. 

Moreover, the government in its latest move instructed its foreign ministry that visas for Chinese academics, industry experts, businessmen, and advocacy groups cannot be granted or extended without prior security clearance. 

Similar measurements have long been employed with Pakistan, India’s neighbor and probably “enemy number one.” India also recently blocked dozens of popular Chinese smartphone apps including TikTok. China’s rivalry with India has reached a new level. 

And then, the rest of the world

Beijing’s recent imposition of a sweeping national security law on Hong Kong, a former British colony, has spurred global fury and mounted tensions with London. The British government has offered fast track citizenship to 3 million Hong Kong residents what Beijing has termed as “gross interference.” 

Britain also threatened to sideline Chinese technology giant Huawei from building its 5G networks, triggering a warning of “consequences" by the Chinese ambassador in London. France has also indicated that the would follow Britain in shutting down Huawei. 

Western media interprets the Chinese military provocations to its neighbors as a “hyper-power display” and possibly a message for the US. 

According to William Choong, senior fellow at the ISEAS Yusof Ishak Institute in Singapore, “In the Chinese mind, the US has lost its mantle of leadership in the Asia-Pacific, if not the world. So, China does see it as an opportunity to press the advantage on some of the hotspots in its part of the world.” 

A friction between China with Australia surfaced when the latter demanded an independent global review on the origination of the new coronavirus. Soon after that, China barred beef imports from Australia’s four major slaughterhouses over “food safety” concerns. 

China did not exactly like Canberra’s stay under the American umbrella. The relationship further got cold over the Hong Kong issue when Australia put on hold its extradition treaty with Hong Kong and advised its citizens there to consider leaving. 

China is a very important trade partner to Australia, and yet, the Australian government is increasingly willing to risk its diplomatic bond with China to counter its assertive foreign policies. China recently stepped up the pressure on Australia by declaring an antidumping probe into the country’s wine exports.

Diplomatic ties between China and Canada plummeted over the arrest of Meng Wanzhou, chief financial officer of Huawei Technologies and daughter of Huawei’s founder and billionaire businessman Ren Zhengfei, in Vancouver in December 2018 on a bank fraud case at the request of the US authorities. 

In retaliation, as many would interpret, China detained two Canadians, a former diplomat and a businessman, and accused them of espionage and thereby imprisoned them. Furthermore, China had also restricted imports of canola oil, pork, and other Canadian products after Meng’s arrest. Meng’s case is waiting to stand trial. 

Recently, a Chinese envoy to Ottawa accused the US of being a trouble-maker in the Sino-Canadian relationship.  

Europe’s attitude towards China is also toughening inexorably. The EU are limiting their reliance on China after the supply-chain disruptions it faced due to Covid. Germany took steps to review and tighten their laws to shield against predatory Chinese investments on realizing the Chinese involvement in German industrial giants, including Daimler, the automaker, and Kuka, the country’s largest robotics producer. 

Japan has already declared that they would subsidize more than 50 companies to bring their investments back home or to shift towards South-East Asia as part of efforts to “decouple” economies and companies from China. Taiwan is following suit. 

The South Korean government promised tax incentives, financial support, and easing of investment-related regulations to the companies that will leave China. 

On top of that, many firms have already adopted a “China plus one” manufacturing hub strategy since the Sino-American trade war began in 2018.  

Predatory practices

Many countries have fallen prey to China’s “predatory” geoeconomic strategy. Sri Lanka, a country which has been in India’s diplomatic orbit for some time, had to formally hand over the strategic port of Hambantota to Beijing on a 99-year lease in December 2017 failing to pay its debt to a Chinese state-owned firm. 

In September 2018, Zambia lost Kenneth Kaunda International Airport to China over debt repayment failure. In 2019, the Kenyan government fell at risk of losing the Mombasa port to China if the government fails to maintain the loan covenants. 

Such clever acquisitions, of course, embody severe threats to the country’s sovereignty. In fear of such threats, Nepal, Pakistan, Myanmar, Malaysia, and Maldives walked back from some mega projects where massive Chinese investments were due.  

China’s relationship has deteriorated with many other countries because of Beijing’s way of handling the coronavirus pandemic, mass detention of Uighur Muslims in Xinjiang province, and its infringements of human rights in Hong Kong. The broad sympathy and medical support that China elicited when coronavirus first spread in Wuhan has gone away. 

However, it is not that simple to curb the economic and geopolitical influence of China by merely imposing some trade and economic sanctions similar to those that the US imposed on Cuba, Iran, North Korea, or Syria. The case of China is largely different. 

The case of China

A deep look at the economic strength of China reveals some captivating facts. China gave loans to 32 of the richest nations in the world. According to an Al Jazeera report from May 30, 2020, the world’s debt obligations to China rose from $500 billion to a staggering $5 trillion between 2000 and 2017 which is about 6% of the world’s economic output. 

China and its subsidiaries have lent $1.5 trillion directly to 150 nations -- making China the world’s biggest creditor, overtaking the IMF and World Bank. It has also made unreported loans worth $200bn. 

China is experiencing explosive domestic growth for at least the last 20 years. Their investment in technology, education, manufacturing, and military are tremendous. 

China found monumental success in reducing poverty. It contains 20% of the world's and as its people are getting richer, they are consuming more, and that growth in domestic consumption is making China a formidable world economic leader. 

Even if the American, Japanese and, European firms drift away from China, the production inside will continue thanks to the vast and growing Chinese domestic market. 

China has made huge investments in the poor but resource-rich African countries. In 2013, China launched the Belt and Road Initiative (BRI) with a view to expanding trade links, enhancing regional connectivity, and embracing a brighter future. 

By many measures, China’s BRI has been a colossal success. The World Bank estimated in 2019 that more than $550 billion worth of railways, energy plants, ports, and roads have been built or are in progress. 

Reportedly, at least 100 countries have either signed deals or expressed interest to be a part of the BRI. On top of that, in 2015, Beijing launched a state-led industrial policy, “Made in China 2025” -- a 10-year plan -- that intends to make China a protagonist in global high-tech manufacturing and surpass the Western technological prowess in manufacturing electric cars and other new energy vehicles, developing agricultural technology, next-generation telecommunications, state-of-the-art robotics, and artificial intelligence. 

By 2025, China targets to reach 70% self-sufficiency in high-tech industries, and by 2049, which will mark the hundredth anniversary of the People’s Republic of China, it wants a China-centric global trading network. 

It appears from China’s approach that they are considering their economic and technological power more important than traditional military might in securing its global ambition. It is also true that, however vast China’s resources appear, they are, of course, finite and China has some fundamental internal troubles too. 

The pandemic has not improved yet and the trade war and global supply chain disruptions have forced the world to have a sluggish growth. Chinese President Xi Jinping announced in 2017 that China has entered into a new era and must take the centre stage in the world. 

Beijing’s disguised ambitions are now wide open. The threat of an emerging “cold war,” if turns out into reality, will of course permanently alter the present geoeconomic and geopolitical dynamics. 

Asif Reza Akash is a freelance contributor. He can be reached at [email protected]

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