Post-Pandemic, China will remain the challenger

Years before the Covid-19 pandemic, Xi Jinping had already initiated fundamental changes to Chinese foreign policy. While his recent predecessors had been downplaying Chinese power and ambitions, he calculated that the time had come for Beijing to assert its bid for global leadership. This was because, in his reading, “China is closer than ever before to being the centre of the world stage, it is closer to achieving its goals, it now has the ability and the self-confidence to achieve its objectives.” Over his tenure, China has been on the front foot and pursued these goals at every opportunity: from grabbing disputed islands off its coast to setting up multilateral economic institutions that challenge the West; from underwriting infrastructure development across Asia, Africa and Europe to extending its military power projection to the Pacific, Indian and Arctic Oceans.

It is not surprising that Xi Jinping is seeing the pandemic as yet another opportunity to promote China’s grand geopolitical interests. Sure, the manner in which Beijing is going about it is rather tasteless, and less antagonising routes to power are available. But realists can hardly blame China for doing what it is doing. Not least when it is scooping up the opportunities created by the mis-steps and lapses of the United States, other Western powers and its neighbours — including India.

Take the case of the World Health Organisation. The United States suspended funding to the WHO after President Trump concluded that the international body was overly under Beijing’s influence. How can China be blamed for happily stepping into the breach, raising its financial commitments and claiming to promote global public health? In any case, it is spending a lot of money and energy into whitewashing its own sins of omission and commission in the early days of the pandemic and positioning itself as the world’s biggest saviour.

Just like the outcome of this global propaganda effort, it is by no means certain that China’s bid for global leadership in the post-pandemic world will succeed. Consider this: even before the pandemic, it had already antagonised every one of its big neighbours, save Russia. This antagonism has deepened and crossed political lines as they saw Beijing in no mood to slow its pursuit of territorial claims despite the raging pandemic.

Rightly or wrongly, many countries are holding China responsible for the spread of the pandemic. Recent surveys in the United States and India indicate that Beijing is seen as a culprit in popular opinion. Australia is demanding an investigation into the origins of the outbreak. Some African voices are demanding compensation. More strident voices in the West are toying with demanding reparations. Amid these growing bubbles of resentment worldwide, Chinese diplomats are taking smug, brazen, pugnacious, sarcastic and often juvenile positions in their official and social media statements. If this is an example of the vaunted Chinese strategic acumen, Chinese leaders are either reading Sun Tzu wrong, or that Art is overrated.

It is more likely that China will find abandoning the Deng Xiaoping formula fatal to its great power ambitions. Xi Jinping reversed what Carl Minzer calls Deng’s trifecta—stable, institutionalised Communist Party rule, high economic growth, and an openness to the outside world— thereby setting in motion the beginning of the end of China’s rise even before Covid-19 arrived. In the post-pandemic world, domestic politics in America, Europe and Asia is likely to gravitate toward anti-China positions.

International politics over the next few years will be shaped to a large extent by apportionment of blame and possible demands for reparations. This will colour developments in geo-economics, technology, public health and environment, adding greater sharpness to existing differences. With the United Nations, WTO and other multilateral organisations receding in effectiveness, Beijing will find the external environment much less conducive to its interests.

It is an open question as to what extent China can pursue Xi’s grand goals if global economic winds change direction. The world’s richest countries have realised that — regardless of the politics — there is a genuine need to shift supply chains away from over-dependence on China. There will be political calls in the West to “bring the jobs back” from China. While this will be impossibly exorbitant, some combination of on-shoring, near-shoring or “friend-shoring” will move the factories and jobs out of China and to countries within the circle of greater trust. This will be costly for Western consumers and a blow to China. Beijing can weather the storm by shifting focus to its large domestic market, but at the cost of its international influence.

It is unclear how receptive the world will be towards Chinese technology and investments, or indeed to Chinese immigrants. Xi’s Belt and Road Initiative will almost certainly encounter some turbulence. Many recipient countries will seek renegotiation of loan arrangements, increasing Beijing’s dilemmas. If China agrees to softer terms to one, it will face a snowballing situation where all debtors will seek better terms. If China refuses to renegotiate, and the debtors put up their hands, then Beijing will face the nationalist backlash of the kind it saw in Sri Lanka and Malaysia. In other words, to the extent that Beijing expected financial returns from BRI projects, those returns just got riskier.

I cannot say what effect the Covid-19 pandemic and its international consequences will have on China’s internal politics, but their policy challenges have certainly become a lot more acute. To that extent, Xi’s “China Dream” has receded more into the distant future.

In the immediate post-pandemic world, China will remain a challenger for global leadership. The United States will remain the predominant world power, despite its wounds, self-inflicted or otherwise. What a lot of people miss is that the smallest failings of open societies are visible to all, whereas even fatal flaws of closed societies become visible only after their demise.

(The writer is Founder and Director, Takshashila Institution, Bengaluru)