China’s Signaling Under President Xi Jinping – Analysis

By Prashant Dikshit*

China’s President Xi Jinping has now emerged supreme. The 19th National Congress of the Communist Party of China consolidated his authority not just for five years but in, a certain view, for life. Normally, a reappointment of a head of state ought not to emerge as a cause of concern for India but for the methods employed by the Chinese regime under Xi’s leadership to intimidate India, whilst pursuing a strategic economic control of large parts of the world.

When India was confronted by the Doklam standoff, many analysts were baffled by the nature of the escalation dynamics of the syndrome. The scenario suggested that whilst the troops of the Chinese Peoples Liberation Army (PLA) were demonstrating a rather belligerent attitude towards the Indian troops, there was no attempt by Beijing to establish a supply line, should the confrontation escalate to a larger armed conflict. It was as if a military adventure in the garb of building a road in the Bhutanese territory has been halted but allowed to appear ominous and threatening especially to the Indian regime. There was seemingly a message to the US as well with whom India’s burgeoning strategic partnership was publicly castigated by Chinese leaders.

However, the picture is clearer now. As suspected then, it was as much a demonstration of domestic supremacy within the political realm of the People’s Republic of China (PRC) as also to the immediate neighbor, India. While most believed that a power struggle was in the offing leading to the five-yearly congress of the Chinese Communist Party, it is now evident that Xi Jinping was orchestrating his rise to power.

The sequence of recent events indicated the nature of activities. The Chinese regime had scoffed at the Philippines, launched proceedings and the rulings in the Permanent Court of Arbitration (PCA) against them with respect to the so called “Nine-Dash Line” in the South China Sea and clearly asked India to refrain from commenting on the issue. It was a gesture of hegemony.

One will also do well to take note that the operation of the port at Hambantota in Sri Lanka by the Chinese could only be reshaped at the intervention of the Indian government by bringing a security clause but not without the Chinese company obtaining 80 per cent shares in the port managing company. And, encroaching Bhutanese territory to build a road was to negate the spirit of the security treaty between India and Bhutan. One would believe that the last action, in this series of actions, was to declare the 3,000 km-long road corridor as part of China Pakistan Economic Corridor (CPEC), from Gwadar in Pakistan to Kashgar in the PRC passing through territory claimed by India.

During all this, border issues are not being allowed to be resolved whilst the Chinese regime deliberately scuttles Indian efforts at joining the Nuclear Suppliers Group and blocking India’s efforts to get Jaish-e-Mohammad Chief Masood Azhar declared as an UN-designated terrorist. Xi’s launch of the One Belt One Road (OBOR) initiative was meant to isolate India from this global process.

The phenomenon of economic stranglehold has unfolded somewhat like this: Chinese companies with the protection of their regime in Beijing have spearheaded the pursuit of infrastructure building contracts with loans being arranged through Chinese banks at reasonably high rates compared to what is being provided by the International Monetary Fund and the World Bank. Most of these contracts have come about in countries where governance is poor and whose rulers are willing to be bribed in return for awarding contracts. However, down the line, when the regimes are unable to repay the loans, the Chinese regime coerced these governments to transfer the liabilities in acquiring their mines and other businesses.

For example, under Xi’s tutelage, China has established a military base in Djibouti in the Horn of Africa. It is located next door to a US base. For this purpose, billions of dollars in Chinese loans have been made available to Djibouti’s heavily indebted government. Up to 2014, Chinese banks, contractors, and the government loaned over US$86 billion to African countries, of which Angola, the Democratic Republic of Congo (DRC), Ethiopia, Kenya, and Sudan were the top recipients. These large loans are beginning to raise questions about debt loads in African countries, showing indications of a potential debt crisis.

In another instance, on 7 July 2017, a report emerged, which stated that China’s signature US$5.1 billion Jakarta-Bandung high-speed rail project in Indonesia had to be shelved. But Chinese infrastructure developers are still taking a dominant position in Indonesia’s ambitious 35,000MW electricity expansion despite the disastrous 10,000-megawatt (MW) “crash” power programme, which finished years behind schedule and left state-run power supplier PLN with serious maintenance and performance issues. The crash programme began under the previous Susilo Bambang Yudhoyono administration and the Chinese-led consortiums built one of the largest coal plants using lo-tech boilers and second-hand equipment.

It has also been assessed that the PRC is purposefully acquiring “anti-access/area denial” capabilities. The idea is to use pinpoint ground attack and anti-ship missiles along with a growing fleet of modern submarines and cyber and anti-satellite weapons to destroy or disable another nation’s military assets from afar.

The PRC under Xi is signaling with the world’s largest army in the world, with an active force of 2.3 million, when China’s real military strength is increasingly emerging elsewhere. Instances of expansionism and sheer financial strangulation could lead to strategic control and eventually a cause for armed conflict.

* Prashant Dikshit
Former Deputy Director, IPCS