Is China in imperial overstretch?

At face value, China's $18 trillion economy looks like an unstoppable force. Despite globalisation shrinking, it remains the cheapest place in the world for manufacturing. Spending $224 billion a year, its official defence budget is second-highest in the world. Unofficial estimates put defence spending at $700 billion. With 500 nuclear warheads, it has third-largest nuclear arsenal; add to it the largest navy and the biggest army.

From AI to space, the Chinese are also getting innovative. The $1 trillion Belt and Road Initiative (BRI) dominates infrastructure building globally.

However, look and you find that China is overextended. Its armed forces are stretched from the high Himalayas to the South China Sea, and further beyond. Add to that the complexity and cost of invading Taiwan and you get the picture of China’s strategic dilemma where to concentrate force and how to allocate limited resources for geopolitical ends.

India, unlike China’s calculations, has held its own in the Himalayas, and ramped up infrastructure and matched Chinese deployment locking out major and expansive Chinese deployment.

Japan has ramped up its armed forces spending about $53 billion, and plans to spend 2 per cent of its GDP on defence by 2027.

The Philippines too has been rattled into action by China’s aggression in its waters and in the South China Sea. The Chinese have repeatedly stopped and countered the Philippines Navy and Coast Guard. The Philippines is all set to continue exploring areas suspected to be rich in oil in the South China Sea, and this could lead to a serious confrontation with China. The Philippines is also offering five large navy and air bases to the US that can complicate any Chinese invasion of Taiwan.

In the Indo-Pacific, the Chinese navy is increasingly looking thin as it confronts the navies of the QUAD. The grouping of Australia (which is seeking nuclear submarines), India (which is procuring a third aircraft carrier), Japan (on a defence spending binge), and the US (which is pivoting to the Pacific) combine ties down China across the blue waters.

This is the geopolitical pickle China finds itself in. It has made too many enemies at once, and does not have enough allies to offset the balance.

China is in an imperial overstretch because of Its expansionist pursuits that are now looking beyond its economic, political, and military capabilities. This has been observed throughout history, affecting powerful empires that succumbed to the burdens of maintaining vast territorial holdings. In China’s case, global coercion and its enormous associated costs are weighing down an aging population and a slowing economy.

China’s fantastic growth that has seen 400 million people lifted from poverty to middle income is a feat unparalleled in human history — but, it has a fundamental problem: huge debt. That mountain of debt is now about $12 trillion in state and local debt alone. This is showing on the growth front. GDP growth is now down to 5.2 per cent, the lowest in two decades not counting the Covid-19 years. Even this number is being questioned as hyped.

Xi Jinping has centralised power absurdly even by dictatorial standards, and his paranoid approach has targeted foreign investors including threat of jail for espionage for MNC CEO’s. Many companies are looking elsewhere despite skill, scale, and cost advantages that China offers.

The BRI, Xi’s signature project, is too costly, and in countries that are mired in debt like Pakistan, Sri Lanka, and Kenya are building ports that the host country cannot afford to use or producing electricity and making railway that are locally unaffordable.

In many ways China is like Germany before World War I — it has too many enemies and it is peaking too soon with too few allies.

This is a combustible mix, and could take just one spark like an overconfident Beijing moving on Taiwan or the robust response from the US if Donald Trump comes back to power in 2025. The grand bargain of economic growth for China and cheap resources for the West was supposed to moderate China’s behaviour and build a new world order. That world order now is replaced by a spluttering overstretched Chinese empire, and given that it’s a revolutionary state run by a dictatorial communist party, China’s response to its imperial overstretch is unlikely to be a course correction.

Get ready for a trajectory with China on collision course on multiple fronts, globally.

(Ninad D Sheth is a senior journalist.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.