China appears to be caught in a unique position. On one hand it harbours territorial ambitions and on the other, it has its plate full of economic crisis which demands urgent attention. The latest to come from Beijing is that it has stopped releasing youth unemployment data as its economy continues to falter. Read with this news, another news that the border talks with India are not doing any progress. The 19th round of talks are underway in Delhi right now.
First the economic woes. The central bank in China has unexpectedly cut a key interest rate which is a sure sign of growing official urgency about shoring up the economic growth which fell sharply in the three months ending in June 2023. Most worrying are the unemployment figures. A survey in June found a record 21% population of workers in urban centres aged 16 to 24 could not find work. This is perhaps why Beijing has suspended the survey.
As if this was not enough, the growth in consumer spending decelerated to 2.5% over a year earlier in July from the previous month’s 3.1%. Even the factory output declined from 4.4 % to 3.7%. Even the export demand has plunged. Jinping’s government is trying desperately to revive economic activity without resorting to a large-scale stimulus. These initiatives are hampered by a slump in China’s real estate industry.
These economic indicators are enough to give policy makers sleepless nights. But not for the Chinese leaders who are nursing super power ambitions. The latest is the news item about Chinese ship docking at Colombo port for a ‘formal’ visit. A Chinese warship ‘Hai Yang 24 Hao’ arrived in Colombo on Thursday, 12th August and docked there till Saturday. The 129 meter-long-ship is manned by a crew of 138 members and is helmed by Commander Jin Xin. Exactly a year ago, a similar Chinese ship had caused diplomatic tension between Delhi and Colombo. On 16th August 2022 China’s satellite tracking vessel ‘Yuan Wang 5’ arrived at Hambantota Port. This move invited criticism both from India as well as the USA.
If this was a maritime issue, China is equally stubborn in land border areas. China has recently refused patrolling rights to India. There is no breakthrough in resolving the festering troop face-offs at Depsang Plains and Demchok in eastern Ladakh despite the latest round of top-level military talks being held with China after a gap of four months. For strategic reasons, India has been pressing for troop disengagement at these two places. For India this is an essential first step towards the eventual de-escalation and de-induction of over 50,000 soldiers each forward-deployed by the two armies.
Juxtapose these two pictures and it becomes clear as to why Joe Biden, the president of USA, recently called China a ‘ticking time bomb’. He did not stop at this and continued his tirade against the leadership of the China Communist Party [CCP]. Biden described CCP leaders as ‘bad folks’. It is clear that his real target was the [in] famous ‘Belt and Road Initiative’ [BRI] through which Xi Jinping’s want to realize his dream of making China world super power no 1. For Biden, the BRI is a ‘debt and noose’ initiative due to the substantial levels of lending to developing economies.
This is good politics but bad for international relations. The above comments were made by Biden at a major political fund-raiser. In other words, Biden was talking to his constituency under political compulsions. In the hearts of hearts, Biden knows that both the US and China need each other badly. This is why he sought to walk a fine line between using trade curbs to deter China’s high-tech military advancement. At the same time, he wants a diplomatic rapprochement with the Chinese leaders. And let us not forget that this is not the first time Biden has made such off-the-cuff comments that threaten to upset the work done by his officials. Remember the comments made by him in June 2023? US Secretary of state Antony Blinken had concluded a trip to Beijing and managed to ease the tension between US and China. Within no time Biden likened Xi Jinping to a ‘dictator’.
It must be noted that not only US is uncomfortable with China’s rise, even many European countries share this unease. On Friday 11th August, New Zealand charged China with intelligence activities against the island country and the Pacific region. This was revealed in the annual report of the New Zealand Security Intelligence Service. Though China’s embassy located in Wellington strongly objected to these charges, this routine denial did not carry any water. New Zealand is not the US which does not want China to become superpower no.1. New Zealand is part of the Five Eyes intelligence and security alliance that includes UK, Australia, Canada and US. This body has historically taken a more conciliatory approach towards China, its biggest trading partner. Now a country like New Zealand is forced to go public with its unease with ambitious China.
As far as India in concerned, an active China in Pak-Occupied Kashmir [POK] is a real worry. Since the day China announced China-Pak-Economic Corridor [CPEC], India has been consistently raising its concern and objections. Undeterred, China is progressing with the CPEC. It is not easy to share borders with ambitious China. All concerned and involved must be vigilant.
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