Tuesday, March 17, 2015

Dhruva Jaishankar - Beijing unravelling

David Shambaugh, a noted China expert, set off a firestorm earlier this month when he wrote in the Wall Street Journal that the “endgame of communist rule in China has begun” and that it was “unlikely to end quietly”. Shambaugh is hardly the first veteran China-watcher to suggest that the Chinese Communist Party (CCP) might implode or simply lose its hold on power. Lawyer-turned-writer Gordon Chang has made a cottage industry of such prognostications, while my German Marshall Fund colleague, Minxin Pei, has long pointed out the party’s inherent, and possibly fatal, flaws. Yet Shambaugh’s standing among China analysts, the high regard in which he is held in China, and his past work on the CCP’s adaptability have lent his opinions particular weight, and have generated debate and inspired fierce criticism in both the US and China.

Shambaugh’s arguments are not entirely convincing, particularly when viewed through a purely political lens. The increased political repression that is presently taking place in China under President Xi Jinping is not, in and of itself, a clear indicator of imminent collapse, though it may be indicative of the insecurities of party leaders. Factionalism has also long plagued the CCP — even under Mao Zedong’s leadership. And it should hardly be surprising that party representatives are often cynical about official dogma, as Shambaugh observes. Many of their predecessors were too, including during the Cultural Revolution in the 1960s and 1970s.

But Shambaugh makes a more compelling case when it comes to the implications of China’s economic failure. An economic crisis threatens to fundamentally undermine the compromise that has developed between the CCP and Chinese citizens since the late 1970s: improvements in material wellbeing in exchange for unquestioned single-party rule. This compromise has been tested before, most notably during the Tiananmen Square protests in 1989. But what Chinese politics might look like under sustained adverse economic conditions is entirely unknown, and possibly unknowable. When coupled with the effects of Xi’s wide-ranging anti-corruption campaign, the systemic slowdown of the Chinese economy that is currently underway could undermine the People’s Republic.

The future of single-party rule in China ought to be of major concern to India. China is among India’s largest trade partners and the two countries collaborate closely on various multilateral issues. At the very least, China’s political fortunes will have implications for the global economy, with which India’s future is closely intertwined. China alone was responsible for a third of global growth last year and remains an important driver of international commerce and finance. At the same time, the border dispute remains a serious test of bilateral relations between China and India. The relationship between the CCP and the People’s Liberation Army (PLA) means that there could be uncertain, and potentially severe, security implications for India should the CCP disintegrate or lose its hold on power. 

Whatever India’s concerns may be regarding China’s rise today, the sudden termination of Communist China would present New Delhi with an economic and strategic crisis of the first order. Indeed, the most satisfactory outcome for all involved may be a soft landing, one by which the party gradually liberalises, democratises, and becomes more accountable and transparent. The probability of this is low, at present. Vested interests in China are resistant to such change and Xi is moving the country  in a very different direction, socially and politically — although not necessarily economically. But it is in India’s interests to assess and anticipate the likelihood of various possibilities, and do anything in its power to realise an optimal outcome. 

It is unfortunate that few analysts in India, outside small pockets of officialdom, have the access and ability to make informed independent assessments about the future of communist rule in China. Language, culture, inherent suspicions and mutual disregard all present obstacles to better Indian analysis and planning with respect to China’s future. But the important implications are reason enough for Indians, specially those outside of government in the business and policy communities, to invest more deeply in understanding the intricacies of the CCP’s rule in China.