China's sweeping reforms under Xi Jinping, over-reliance on OBOR has left it in a state of flux
All three pillars on which a country runs – the executive, military and economy – are going through turbulent times in China.
Ever since the Fifth Generation leadership came to power in China in 2013, there have been many dramatic events in the country. As one knows, there are three pillars on which every country runs – the executive, military and economy. All three pillars are going through turbulent times in China.
Just prior Xi Jinping's ascension to power Bo Xilai, who was a possible contender, was purged. When the present leadership came to power, the Politburo Standing Committee was reduced from nine to seven. Of that seven, five were of such an age that they could have only one term instead of the customary two. These incidents were indicative of the unpredictable path that the Fifth Generation leadership would take.
Of the three pillars, executive runs the country and is responsible for its citizens.Under Xi, the campaign against corruption has gained tremendous momentum. This has created upheavals both in the civil administration and the armed forces. The anti-corruption campaign has led to inaction by the bureaucracy for fear of being prosecuted subsequently.
Xi is also said to be promoting his loyalists. The promotion of Cai Qi in May this year as party chief of Beijing is a case in point. Qi has been promoted five times in quick succession in the last three and a half years. The reason that is being attributed to his quick promotions is his association with Xi, when the latter was the party secretary in Zhejiang province.
The 19th Party Congress is scheduled to meet in October this year in Beijing, to decide on the leadership that will run the country for the next five years. A report in The Economist said that, "Since the start of 2016, China’s president, Xi Jinping, has replaced 20 of the Communist Party’s 31 provincial secretaries, as the most powerful leaders at that level are known. He has also shuffled 27 of the provincial governorships (governors are second-in-command). For local leaders, April was the cruellest month: ten jobs changed hands". There is a feeling that in the run-up to the Party Congress in October, people close to Xi are being placed in the 'correct' positions.
Secondly, China’s neighbourhood is witnessing uneasy relationships with China. Japan, South and North Korea, Taiwan, and the other countries who are claimants of the disputed areas in the South China Sea are not comfortable.
To China’s west, another political issue came to light. China’s Civil Affairs Ministry standardised the names of six places in Arunachal Pradesh, with Chinese characters and Tibetan names. Chinese give names to places in two ways. One is as per the phonetics of the name and the second is as per the meaning of the name. For example, the name Shigatse is given the name Rìkāzé. Beijing is known as the North Capital. Chinese have different names for other cities in India also.
Chinese have different names for other cities in India as well. Even though the present issue of naming places may not be very significant by itself, that it has come on the heels of the visit of His Holiness the Dalai Lama to Arunachal Pradesh has not helped in understanding this issue.
The third issue is the East and South China Seas. There was a tougher stand by the Xi administration on both the issues. China declared an Air Defence Identification Zone in the East China Sea on 23 November, 2013. Though a defensive measure, it created tensions in the East China Sea and the Senkaku Islands. China’s defiance of the Permanent Court of Arbitration ruling on 26 July, 2016, and her subsequent behaviour on the issue has got the better part of the world worried about the Freedom of Navigation in this global commons.
On their part, the Chinese have aggravated the issue by trying to promulgate a law on the passage of ships. Japan Times reported on 18 February, 2017, that China is soliciting public opinion on revisions to the country’s 1984 Maritime Traffic Safety Law. The new draft would empower maritime authorities to prevent foreign ships from entering Chinese waters if they are deemed a risk to "safety and order", and enable China to designate specific areas and temporarily bar foreign ships from passing through those areas according to their own assessment of maritime traffic safety. They have also deployed missiles and other defence related equipment on the seven reclaimed reefs in the South China Sea.
Though a legacy issue, Xi ordered sweeping reforms of China’s armed forces, the scale and depth of which has been unprecedented in China.
In the higher defence organisation, the four departments (General Staff Department, General Political Department, General Armament Department and the General Logistics Department) through which the Central Military Commission (CMC) of China exercised command and control over China’s armed forces, have been converted into six offices, six departments and three commissions that will function directly under the CMC.
The seven military regions, into which the Peoples Liberation Army (PLA) was organised, have been converted to five Joint Theatre Commands. A headquarters for the ground forces, which was not existing till now, has been created. The Second Artillery Corps, that possesses all the conventional and nuclear missiles of China, has been upgraded to a full-fledged service like the army, navy and the air force.
A new force, called the PLA Strategic Support Force, has also been created. This force has been tasked to look after all issues related to space and information warfare – including cyber, electronic warfare and psychological operations.
A Joint Logistics Support Force has been established. This force will provide logistic support to all the services. A reduction of 3,00,000 personnel from the PLA was announced by Xi in September 2015. From these large-scale changes, it can be clearly seen that the entire armed forces of China are getting transformed.
The recession of 2008 hit the Chinese economy hard. Till then, China’s economic growth was based on the export model. Foreign investors started pulling their money out of China. The crisis that gripped the Shanghai Stock Exchange in 2015 resulted in the flight of foreign currency.
From a forex reserve of $3.9 trillion dollars, it is now hovering around US$ three trillion, a flight of approximately a trillion dollars from China’s economy. The recession created another problem for China, of excess capacity.
One of the reasons for the One Belt One Road (OBOR) Initiative of China is the excess capacity that China had for cement, steel, glass etc.
Today, all the economic activity and infrastructure projects in China are oriented towards this initiative. There are problems coming up in the execution of the project. India was conspicuous by its absence in the summit. The seven Arab countries cutting ties with Qatar on 4 June, 2017, is likely to affect China’s plans for the OBOR project in the region.
The China-European Union (EU) summit, which was held on 2 June, 2017, revealed the apprehensions of the EU. Catherine Wong, in her article in South China Morning Post, mentioned a European diplomat saying that "the initiative is about promoting globalisation which is positive. But it comes with Chinese characteristics. So, it is not really a market-oriented, liberal, rules-based globalisation that we would like to see. It seems to be more about hierarchy."
It is worth noting that representatives of many European countries did not sign the trade declaration at the OBOR summit in Beijing in May this year. Only time will tell whether China’s move to put all her eggs in the OBOR basket is a prudent one.
Thus, China as a country is in a state of flux. The jury is still out on why Xi chose to place China in such a predicament and how China will come out of it.
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