The World Has Created A Monster In China; Time To Withdraw The Free Pass

It has taken a global pandemic that has killed more than 150,000 people and infected more than 2.2 million (so far) for everyone to realise the threat China poses to the global economy and peace.

Even so, no one is willing to call a spade a spade: undemocratic, xenophobic and racist China is an authoritarian power whose irresponsibility threatens global stability. China is the Nazi Germany of the twenty-first century, and Xi Jinping its new Adolf Hitler.

To be sure, in a world with so many nuclear powers, the Chinese cannot use growing military might alone to subdue or overawe its real and imagined adversaries. It will do so with a combination of intimidation, economic coercion and blandishments. Consider how easily it has brought the world to the brink of an economic depression by sheer irresponsible behaviour.

China is too powerful and irresponsible for its own good. It is amoral to a degree where it is now even seeking to profit – by taking over undervalued companies and selling testing and personal protection equipment (PPE) to countries desperately in need of them – from a dangerous genie it has itself unleashed.

So dependent is the world on China to deal with Covid-19, that it is even now hesitating to call the world’s new Hitler out.

Consider India’s own timid response to the Chinese threat to Indian companies: we have put out a carefully worded statement to amend our foreign direct investment (FDI) policy to indicate that companies from countries which share a border with India cannot invest in Indian companies without government approval. States with which India shares a land border include Pakistan, Afghanistan, China, Bangladesh, Nepal, Bhutan and Myanmar.

While any Pakistani investment will obviously be red-flagged without much ado since it is in a constant state of war with “Hindu India”, it can be no one’s case that Indian companies face a takeover threat from any of the other neighbours, barring China. But we fear to name it.

Even assuming the folks in our over-cautious Ministry of External Affairs did not want to name China for fear of diplomatic ramifications, surely, we could at least have mentioned that neighbours with unresolved border disputes with India will not get a free pass in India.

The tendency to underplay a threat is as old as history.

In Europe, it took two annexations (Austria and Sudetenland in Czechoslovakia) and an invasion of Poland for the world to see Hitler as a threat.

In contrast, despite repeated indications from China that it will respect no international law or human rights issues when it comes to buttressing its own aggressive nationalism, the world has looked the other way repeatedly for over three decades. We have learnt nothing from the appeasement of Hitler in the last century.

Consider the following signals we have received from communist China since the mid-1950s...

China was given a free pass to trample on the rights of Tibetans long ago, by both India and the world. In 1962, as India failed to anticipate Chinese responses to our timidity, we even lost a war badly.

At the height of the Cold War, when Richard Nixon made his famous outreach to China in order to contain an expansionist Soviet Union, China’s mass murderer Mao Zedong got a free pass on any and every issue of human rights.

But even before Nixon made his famous trip, the US had already connived with willing members of the United Nations to give communist China an entry into the UN Security Council along with the veto. This permanent seat was earlier held by the hapless Republic of China (Taiwan). Taiwan got turfed out unceremoniously, and is yet to find a place in the UN general assembly. In 1971, the world gave communist China the power to veto anything it disliked.

In the 1980s, when China under Deng Xiaoping shifted to a capitalist mode of development through 'free trade', the world gave him yet another free pass. It got the most liberal terms ever to open up its economy, and to date it still hasn’t done so convincingly.

China used mercantilist policies to convert itself into the world’s manufacturing hub, with no obligation to balance trade or to let its own currency find its true level. Nobody even called out this asymmetry till it was too late. The world helped create a huge economic and military monster that could devastate entire economies in a fit of absolute absent-mindedness.

When the Chinese people demanded internal democracy, the world turned a blind eye after troops massacred protesters in Tiananmen Square in 1989. The world was happy to let that pass, as China was beginning to welcome Western companies to set up shop and benefit from cheap labour, a labour force with no legal protection against employers.

Entire global supply chains were shifted to China at huge cost to wage incomes growth in the West. Greedy global conglomerates – and their governments – were happy to ignore China’s human rights transgressions in return for cheap Chinese products. China won the West over by cheap consumer thrills.

Two years ago, even the Vatican succumbed to Chinese pressure, and agreed to a deal under which China would get to vet or veto priests appointed to the Chinese Catholic church. The well-touted separation of church and state floundered on the rocks of Chinese intransigence. The Pope bowed to Chinese state imperialism, giving the latter a say in religious affairs.

China has also used its enormous military might to stamp out dissidence in its Uighur minority community in Xinjiang. Thousands have been sent to internal Gulags and compulsory re-education and de-Islamisation programmes. The Muslim world, normally very vocal about the treatment of compatriots anywhere in the world, kept mum, anaesthetised by China’s huge foreign aid and investment programmes.

Over a larger timeframe, the US and Europe also ignored China’s continuous theft of intellectual property, presumably because China was seen to be focusing on low-cost manufacturing, where the West had anyway lost its edge. It needed a cantankerous President like Donald Trump to finally call out Chinese theft, but Trump’s trade war against China has hardly been consistent or driven by strategy.

China has also used its privileged position as manufacturer of many electronic products to illegally plant spyware in some of the products it ships abroad. Over 30 companies, including Amazon and Apple, were caught napping when a tiny Chine spy chip planted inside motherboards exported to the US started hacking into Western technology companies.

It is only after China facilitated the coronavirus (Covid-19) pandemic by not alerting the world when it could have done so that attitudes are changing. The world has begun to question China, and inoculate itself from its wayward and opportunistic policies.

But China remains unrepentant. Instead of acknowledging its mistakes, China has gone after its critics and launched a propaganda war to claim innocence. But the world is not buying it (read here, here, here)

The world is in a mood to take China on.

In the US, there are class action suits against China seeking trillions of dollars in compensation for causing the pandemic and destroying economies.

As China tried to buy off companies on the cheap, the European Union has created guidelines to ensure that national governments can prevent this from happening.

Germany has armed itself against Chinese takeover of vulnerable companies. So has Australia. Japan is incentivising companies to move supply chains out of China.

The US has blocked Huawei, a Chinese company with ties to the military, from participating in its communications networks, from last year.

But this is not enough.

China is not a threat only because it can now buy strategic assets in the West and in India due to low valuations. It is by every definition a rogue state, which respects no law except those created by itself; it respects no one’s property rights if it can find a way to steal it; it will respect no boundary or border if it sees a way to acquire territory or resources for itself through intimidation and pressure.

China is already the world’s second-largest economy by dollar gross domestic product (GDP). Its GDP is around $14 trillion compared to the US’s $20 trillion. It is only a hop, step and jump away from the No 1 rank.

It is already No 1 in terms of purchasing power parities. The pandemic, which will destroy world GDP and US economic leadership, is exactly what the doctor ordered for China to achieve numero uno status ahead of its scheduled date. US GDP is about to collapse while Chinese GDP will still grow positively this year.

While it would be a bit of a stretch to claim that the pandemic was caused by China with this ulterior motive in mind, this will be the net effect of Covid-19.

The world cannot deal with China by taking tiny steps separately for its containment, economically or militarily. It has to band together to deal with China, just as it did against Hitler. For China is not a benign superpower willing to play by any set of reasonable rules.

It is time for the world to withdraw China’s free pass and quarantine its power by united action.