China’s loss is India’s gain

Claude Arpi, Niti Central|February 4, 2015

Where is China going? Apparently the Middle Kingdom is not doing too well! Even economically! The economic publication Bloomberg recently reported, “China’s economy got off to a weak start in 2015 with disappointing manufacturing and service-sector readings, renewing calls for the Government to introduce more measures to spur growth in the months ahead.” In January, the factory activity recorded its first contraction in more than two years.

The Daily Economic News, a Chinese publication, predicted five macro-economic challenges for 2015. First, the increase in money supply may not be sufficient to revive businesses; second, exports would continue to decline; third, as banks tighten credit, the demand for credit could be difficult to satisfy; fourth, real estate developers will be unable to reap their usual high returns and lastly, as the Central Government tightened local Governments’ spending to reduce their debts, private investment may not be enough to push up local schemes.

It is difficult to say if the prediction will be correct or not; in any case, President Xi Jinping will have other serious problems to tackle in 2015.

Two other issues could particularly destabilise China: the current anti-corruption struggle and the severe new restrictions on Internet.

One ominous sign is the large number of suicides recorded in China. The Party has started asking its cadres to check on the number of ‘unnatural deaths’ of party members, in other words, suicides.

Zhang Ming, a political science Professor at Renmin University in Beijing told Bloomberg, “There’s a growing number of official suicide cases reported over the past two years as the anti-corruption campaign intensified,” adding that officials don’t want “to expose the people behind them, so the easiest way is to commit suicide to protect people above them and their family members”.

In case of deaths, Party cadres are instructed to fill up an eight-column form with name, sex, rank and work unit of the deceased, along with the time and cause of death. If possibly due to suicide, the location, method of death and status of the investigation, have to be given.

Wang Qishan, secretary of the CPC Central Commission for Discipline Inspection (CCDI), the man behind the anti-corruption crusade, told a recent meeting of the Commission that “the handling of cases implicating corrupt high-ranking officials – such as Zhou Yongkang, Xu Caihou, Ling Jihua and Su Rong – showed the CPC Central Committee’s unwavering volition to punish corruption and strictly manage the Party.”

‘Wrongdoings’ include forming fractions and cliques, exchanging gifts bought with public money, banquets, travels, entertainment activities and ceremonies using public funds, “The situation has improved, but the root is still there, even though the tree has fallen. New tricks might be pulled under huge pressure, and our mission to prevent re-occurrence is arduous. …We cannot afford to lose,” said Wang.

“We can’t afford to lose the battle” seems the new war cry of Xi and Wang.

The CCDI report revealed that “[in 2014] 226,000 cases were filed as a result of complaints, with 218,000 closed. The cases led to 232,000 officials being given Party or administrative punishment, a yearly increase of 30 per cent, and another 12,000 people were transferred to judicial organs on criminal charges.”

Wang told the Commission that some officials still haven’t realised how ‘grave and complicated’ was the corruption issue. He mentioned several remaining problems such as slack supervision and ineffective measures to address grassroots disciplinary violations.

To corruption should be added, loyalty.

In Xinjiang in 2014, 355 Communist Party cadres have been investigated for ‘breaching party political discipline’, (usually, an euphemism for corruption), a six-fold increase over the previous year. Out of the 355 cadres investigated, 333 received unspecified punishments, which means that ‘loyalty’ and not ‘corruption’ was the main charge. President Xi has warned that wavering on core issues such as openly opposing the party line, or secretly working against Central Government would be severely punished.

In Tibet, 15 party officials have been disciplined “for joining independence groups and providing intelligence to the Dalai Lama in activities deemed a threat to national security”. The ‘cleansing’ is not limited to restive provinces. The Central Military Commission announced that the PLA must root out ‘chronic diseases’ and adopt a zero-tolerance stance toward corrupt officers. The reason for the intense chasing of the corrupt is that President Xi Jinping knows that if the disease is not eradicated China will follow the path to disintegration like the Soviet Union.

But is it not too late to tackle a seemingly incurable disease?

Xi believes that Marxism is the answer.

During a recent Politburo session, Xi spoke to his colleagues of the importance to be committed to Marxism and Socialism. The South China Morning Post mentioned, “The Politburo squeezed a collective study session on Marxist dialectical materialism into its tight schedule, a year or so after it held a similar one on historical materialism.”

Xi would have stressed that dialectical materialism was the party’s worldview and methodology in its efforts to unite and lead the people. The SCMP analysed, “The ruling party deviated from hard-line Marxist ideology when Deng Xiaoping launched market reforms in the late 1970s. Since coming to office, Xi has been eager to fill the ideological void by emphasising both Marxism and traditional Chinese culture and values.”

The second ‘hardening’ is the new tightening over the Internet. While China sees the controlling of Internet beneficial to its indigenous growth; some are aware that it is a tricky issue which could badly boomerang on the country’s economy.

The Global Times recently admitted that the ‘Great Firewall’, as China’s sophisticated Internet monitoring system is known, is misunderstood, “The firewall blocks certain overseas websites in a targeted fashion, rather than isolating China’s Internet from the overseas one.”

It argued that the success of China’s biggest Internet giants — Baidu, Alibaba and Tencent, the so-called ‘BAT’, was due to the firewall.

Without this, The Global Times concluded, “China would become the realm of Google China, Yahoo China and Facebook China.”

What is interesting is that for the first time, the mouthpiece of the Party admitted the existence of the firewall.

The New York Times wrote a hard-hitting editorial, “Under the guise of improving security, the Chinese Government is clamping down on technology companies and further limiting the access its citizens have to information that is not sanitized by the Communist Party. These moves will hurt the Chinese economy and create a major rift between China and the rest of the world.” It quotes a letter sent by foreign business groups to President Xi protesting against new policies that “require companies that sell computer equipment to Chinese banks to turn over their source code to the Government.”

The US newspaper threatened, “But this push for greater control could cost China dearly,” before concluding, “Mr. Xi cannot expect the United States or any other country to engage in negotiations to liberalise trade and investment with his country while his Government is actively making it impossible for foreign businesses to survive there.”

It is where India, the largest world democracy, where freedom truly exists, has certainly a slot to occupy. The ‘Make in India’ of Modi Sarkar may become more and more popular with foreign investors extremely nervous at the latest developments in China.

Born in Angoulême France, Claude Arpi settled in India 40 years ago. He is the author of several books on Tibet, Sino-Indian relations and French India.

Disclaimer: Opinions expressed in this article are the author’s personal opinions.


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