26 January 2021
We first saw a brief glimpse of Jack Ma, that was on 20 January 2021, as if to offer an olive branch of sorts to the incoming Biden Administration. Yet, Xi’s China is not a suitor, trying to woo the US, which could well be Deng’s China back then in the 70s and 80s. Just consider this, the Chinese beat the US in attracting FDI by several billion $US last fiscal, and as we can see a blown away first quarter and perhaps a weak second to follow, with corona virus deaths hogging the limelight in domestic US and will be an administrative priority, the next fiscal of this current year too would be a repeat, and if that be so, investors are likely to consolidate, and the US would be in a new competition in what is clearly uncharted territory for America and much of her collaborative Western Compact.
Yet, the signs were already there, that it took just one stint to undo decades of economic tempo, when Trump Presidency came in and withdrew from the TransPacific Treaty, refused to join the RCEP which is basically China built duplicate for the original TransPacific one from which America walked out. Remember when initially some one copies you, it is a sign of weakness on their part, that it is sign of flattery, then when they begin to copy your moves such that people forget you are the original, then you are so lost out, that you forget how it all started! So now China has made one RCEP with its near neighbourhood in the Eastern Part of the Globe, and then made one with EU which was Comprehensive Agreement on Investment(CAI), https://thediplomat.com/2021/01/the-strategic-implications-of-the-china-eu-investment-deal/ and if you want a non diplomatic version of what this entails, it is this:
1.China will continue to invest in EU companies and accept Joint Ventures in China, besides fuelling part of its trade surpluses with the bloc into local EU ventures and partnerships.
2.This means, China will now steal technology and Intellectual property from EU companies and EU both at home and abroad with greater impunity and access.
3.In return the EU has been offered some fig leafs on protecting their interests, in opening up access to Chinese markets and to ‘liberalise the Chinese labour markets’.
Remember even the RCEP was viewed as unfavourable by India and hence she kept out. So why would the Western Compact, in just four years of American absence, rejig their matrix to bite the Chinese bait? What are the realities about America that the Western Compact knows, which is being at present dismissed by Americans and to some extent even Indians who are now betting more on America than at any given point in India’s history?
The Chinese currency trick of using a digital version and a physical version is any case a formalisation of their early currency duopoly system, where the internal Renminbi and the external Yuan held differing valuations against the benchmark $. Now the Chinese have acquired the kind of heft, where they waged not just wolf diplomacy which is more like Aussie sledging or mind games in Cricket, but they actually went to trade war with Australia and won the first round! Then Chinese did something they didn’t do till now which was to start buzzing Japanese, Taiwanese airwaves, their straits and disputed waters, and taking on exploratory vessels of ASEAN countries along the nine dash lines in SCS! I cannot remember a year like 2020 for PLA, where it was occupying territory in Himalayan frontiers, in was engaged in ocean going and offshore patrols, it was doing marine, amphibious operational training and flying sorties for ASW, Bombers and Fighters . Then came the decision of CMC to enable the Coastguard to challenge with force ships or vessels of other flags in SCS reefs and corrals of which many the Chinese have constructed into pockets of real estate https://intelfeedia.com/current-intelligence-blog/f/new-china-law-increases-risk-of-armed-maritime-confrontation. After initial denial, India confirmed that there was another bout of fisticuffs with injuries to its own and to PLA troops in the Sikkim sector, even as locals in Ladakh claimed harassment by Chinese ‘citizens’ when they went grazing in their traditional pastoral lands.
In Davos meet, President Xi was all ‘peaceful rise’ with full of promises, stating that China would do its bit for Climate Crises. You could hear him and not hear him, because, while China was doing all this upheaval diplomatically and militarily, its President comes and warns world leaders against a ‘new Cold War’, stating glibly that there should be no decoupling either.
He offered what the American Climate Czar Secretary Kerry would grab with both hands, China to go carbon neutral by 2060 with a 65% of reductions by 2030, ( under one decade)
and if you read his speech you will find the mantra that China and the world needed to grow together ( It means that Chinese economy would become more CCP outlet going forward)
of how the global economy is interconnected and any attempt to cut off flow of capital technologies, goods and services ( direct reference to ‘decoupling’ was made) to turn the clock back to isolation and closed set up is simply not possible.
He emphasised the promise to open up while retaining uniqueness and identity of individual countries ( translation- don’t try to criticise me or the CCP, we all have our warts and prickly issues, you just focus on the fruit- cheap Chinese goods and services, Chinese capital infusion, assistance, market access etc)
But a part of his address was for detractors at home too, which means that Xi is in a corner more than he will admit obviously!
When he says that lack of robust driving forces, he is referring to the head winds to Chinese economy, not from just the Pandemic disruption, but the unprecedented floods last year, the on going spurt in cases in provinces north of Beijing, to the economic hardships the Chinese are facing and will face for the near future. His talking of lack of global governance models, uneven global development that is unable to meet people’s expectations, and how this must be overcome with well coordinated interconnected approach and win-win cooperation, is griping for domestic consumption, even while sounding placatory to an appreciative global audience! If you took out the contextual references to the Covid19 Pandemic and how China has helped 150 nations with medical supplies, ready to help with vaccines, and how globally we must come together to fight off the pandemic, this speech was more like a repeat of his address to the same forum in 2017!
Back then he had also made promises that were more a targeted sales pitch to the Chinese people than the global stage for which it was physically made. He promised a path based on China’s realities, putting people’s interests first, pursuing reform and innovation, common development through opening up!
His main pitch this year was the dangling promise to build a world wide free trade network, opening up China too in the process. ( For the Western Compact the lure of the Chinese market has been there for nearly two centuries now, Rudyard Kipling famously said if we added a couple of inches to the Chinese long coats, factories in Manchester would keep spinning and weaving for decades!)
International Game is all about opportunities and a simple understanding of national interests. Xi being a dictator now, is also showing how his personal interests too are at work, as he seeks to control the Chinese Polity, Economy, Military and Culture with his Xi Thought and the various schemes launched by him when he first assumed office almost decade back! (Notably complete downplay of OBOR/BRI) There are clear hints in his speech and Chinese responses, that China is facing domestic issues, which a Western Democracy would have laid bare for all to see, but which a Communist Curtain will allow only speculation on.
Safely we can conclude that President Xi just laid out his optics for President Biden. Climate assurances are low hanging fruit, hopefully Biden Administration does not see that as arbitrage for strategic walk back by USA. For now, the guarantee offered by US to Japan for Senkaku Isles is the first big game changer from Biden https://m.economictimes.com/news/defence/new-defence-secretary-reaffirms-us-commitment-to-defending-senkaku-islands/amp_articleshow/80433731.cms outside of the presence of the Taiwanese representative at his inaugural. If next Philippines were to be reassured about Scarborough shoals or about airspace violations, interdiction of her fishing boats by Chinese Coast Guard, it would indicate a new and much clearer role the US sees for itself through the Indo-Pacific Command. If that be so, we can see Vietnam and ASEAN countries seeking formal alliances with Uncle Sam in the hope that the neighbouring Panda can stop chewing at their tender bamboo shoots. If America is serious about a new Cold War with China, the moves Pentagon makes with New Delhi and Taipei in coming months would offer such clues.
President Xi has made his gambit, but it will take more than gentle goading by Biden to nurse the EU, New Zealand and Canada to back off from more economic engagement with China. 2020 was about a virus and an assertive China, 2021 is about an American return, inserting itself into the Western Compact’s calculus. All bets are off, even though the heart wants to cheer from the Biden corner!
indiarubberman.com 