China's changing Party line

Book review of Smokeless War: China's quest for geopolitical dominance

Maybe we are in the middle of a World War! Maybe it sometimes seems peaceful enough because we have not learnt to recognise a war as something other than one that is fought with gunpowder. So while casualties abound, we possibly have little sense of their suffering. A CNBC report in July this year noted the Chinese crackdown on its US-listed tech companies could upset a $2 trillion market. That is about two-thirds the market cap of India’s National Stock Exchange.

 Those developments will hurt though. Just as Covid-19 did in the space of less than two years. For several reasons, the pace of events that could rock the world has gone into fast forward. In the space of less than a year, the world, faced with repeated waves of Covid-19, has begun the largest-ever rejig of supply chains and changed the rules of cyber engagements, all to prevent hostile take-overs of economies. In the middle of all this, a riot in the heart of the world’s sole super power capping an election that has left more US citizens polarised than united, the re-Talibanisation of Afghanistan, a coup in Myanmar or the fall of a government in Malaysia almost seem like local sideshows.

In Smokeless War Manoj Kewalramani offers an analysis of this war in one of the two major contestants in this struggle, China. It is a case history of the far-reaching impact of the pugnacious strategies adopted by the Chinese Communist Party and its efforts to stake out a larger say in the world order. What he demonstrates in the process is insightful. The Party has waged a propaganda war with its citizens to convince them that it has been successful, and now, it has begun to wage a war with its business leaders to redo a 30-year-old economic model. All of this while it also sharpens its ability to wage a war beyond its borders like the skirmish with India and possibly now, the USA.

Dr Kewalramani, chairperson of the Indo-Pacific Research Centre at the Takshashila Institution, goes into fine detail to lay out the contours of these wars. His tour offers readers a synoptic view of how China has engaged with the world once Covid-19 broke out. Reading the book does frequently gives the reader a sense that the events described are too far behind in the rear view mirror. But since these events took place just a few months ago they only serve to remind us of the rapid pace at which the global news clock is ticking. Despite the pace, it is necessary to unpack those elements of change in the sequence they occurred. That exercise, of course, takes time, but there are few other options to keep up with the velocity of the changes.

Smokeless War: China’s quest for geopolitical dominance

Author:  Manoj Kewalramani

Publisher: Bloomsbury

Pages:  210; Price: Rs 699

His notes offer insights from last year about why Beijing shocked the world this year when it cut down Tencent, Alibaba, Didi and Evergrande, one after the other. He argues the Chinese Communist party is concerned with the limited revival of demand in the domestic market as it recovered from Covid-19. “A significant majority of the population that has borne the pandemic-triggered losses is neither being employed nor supported appropriately via a social security net. Li Keqiang acknowledged this challenge during the NPC meetings when he said there are over 600 million people whose monthly income is barely 1,000 yuan, not enough to rent a room in the Chinese cities.”

The book argues the government’s decision to support business more than people in the recovery phase has led to perceptions of “exacerbating inequality”. From this it becomes easy to guess why Xi Jinping was happy to hack into the investor wealth of the tech companies, the most visible demonstration of Chinese business income to please those at the lowest end of the income order.

Since the book was written in 2020 it was difficult to judge the pace at which the Party will move. But he correctly points out that doing this would “require durable and structural reform, which will implicitly entail a shift in political power”. In China the shift in political power would have required prising open the seal of power in the Politburo. The continental giant decided instead to load the weight of the changes on the entrepreneurs. It is a war waged on global investors, domestic ones and plenty else besides.  It stems from “the Chinese leadership’s effort to craft a positive narrative in support of its policy choices”.

Beyond the demonstrated loss of shareholder wealth, there has already been a huge global reordering of supply chains, again in the span of less than a year. From apparently peaceful medical supplies to cyber sectors there are far more defensive shields in each country or bloc that can afford to build those.

Clearly, due to the timing, the author is unable to dwell on the biological warfare angle in the Covid-19 timelines. Most of the charges have occurred only recently and have a long way to play out. Yet as global leviathans face off, the book is a succinct study of how hostilities rise.