How Do We Solve A Problem Like China? First, We Need To Recognise It As Head Of A New Axis Of Evil

Quiz: Which country supports terrorists to target those it considers its enemies? Which one follows no international law except those that benefit it? Which country has almost the whole world worried about its intentions? Which one has almost no real friends among its neighbours? Which one uses every trick in the book to cheat on its chosen partners and renege on international obligations? Which country has only transactional relationships with others, never real friendship? Which country says one thing and means something else?

If your answer is Pakistan, you are wrong. The right answer is China, the world’s biggest new headache. Making small adjustments for time and century, the China of today is no different from a Hitler-ruled Germany, which posed a threat to all its neighbours. Just as Hitler was capable of threatening, bullying, and ultimately cowing his neighbours into submission, Xi Jinping’s China has the same potential.

China sees itself as a nation destined to dominate the world. It thus has its own axis of evil, which includes a jihadi Pakistan that can be used to unsettle a peaceful neighbour south of the Himalayas, and a nuke-trigger-happy North Korea to unsettle an eastern neighbour across the seas, a country constitutionally bound to be only a defensive power after the Second World War.

The world has known this for some time, but has never bothered to voice this reality collectively. China’s decision yesterday (14 March) to stymie the UN Security Council’s move to designate Masood Azhar as a global terrorist is merely one more bit of evidence that China will only play by its own rules, and in its own interests. Even Pakistan, blinded by hatred for India, should worry about what being beholden to China means.

It is 40 years since the 1980s, when Deng Xiaoping told the world he wanted to reform China and lift his people out of poverty. The country has since grown from a cuddly Panda that only wanted to pull itself out of debilitating Communism to a growling bear that brooks no rival. The world, worried more by the Soviet Union in the late 1970s and 1980s, bent over backwards to help China grow, and CEO after CEO, and political leader after political leader, rushed to that country to make it factory to the world. The US and the European Union gave China sweetheart deals to enter the World Trade Organization (WTO), but China repaid that goodwill by manipulating its exchange rates to become the largest world’s export hub, destroying many industries across continents in the bargain.

During those years when the world saw only the benign face of China, it actually adopted two rogue states, Pakistan and North Korea, as its vassals. They were encouraged to use terrorism and nuclear capabilities respectively, to threaten two countries that could rival its own great power status.

In 2016, China explicitly rejected a tribunal verdict that went against it in The Hague over its rights in the disputed South China Sea (the case was brought by the Philippines). After the Doklam standoff of 2017, when Indian troops stopped China from building a road on territory claimed by Bhutan, that country deliberately breached a 2006 bilateral agreement to share hydrological data from 15 May to 15 October. Lack of this data made it difficult to deal with the devastating Brahmaputra floods in 2017.

Under the Indus Waters Treaty, India respected the agreement even while fighting three wars with Pakistan. But China, signatory to the Expert Level Mechanism (ELM) on Trans-border River, simply ignored it when it failed to get its way on Doklam. India’s neighbour Sri Lanka found out that Chinese loans to develop Hambantota Port finally ended with their having to hand over control of the port itself to the Dragon. And so it will be with any country which takes Chinese loans for the Belt and Road Initiative, unless it has the means to repay those loans.

The point of regurgitating all this history, including ongoing history, is simple: China is no longer India’s problem; it is the world’s growing problem No 1. So, how do you solve a problem like China?

The answer is to do the same thing we did with Hitler, but without a war. In this nuclear age, war is no longer an option, but war by other means must now be a central element in countering Chinese bullying, bad behaviour, and intimidation. Just as Hitler was confronted and defeated only when the world combined to do so, this is the only real way of cornering the Dragon and forcing it to pipe down.

The first way is obviously through trade. If the US, EU and India combine to force China to open up her markets and balance trade, that would be the best form of pressure. If we do it separately, as Donald Trump tried to by putting up tariffs on Chinese exports, it is bound to fail.

Next, the US must clearly stop fighting the last Cold War and gear up for the next one, the one where the US and China are two primary antagonists. The Americans are still too obsessed with Russia, which is just a pale shadow of its former superpower self, when the real threat is China. Trump had the right ideas before coming to office, of building an equation with Vladimir Putin, but the alleged Russian interference in the US elections has put paid to this. One hopes that sooner than later, the US establishment realises that Russia isn’t the problem, China is. And it needs the US to set up a global coalition against Chinese bullying, which will then enable Russia to walk out of the Dragon’s crushing embrace.

Third, there are things India must do, starting with the trade and defence fronts. We need to draw China into a discussion where once it crosses a certain level of annual trade deficit, the balance will either be settled in rupees, or China will need to take measures to buy more Indian products to reduce the gap. In 2017-18, India’s trade deficit with China was a staggering $63 billion, which is clearly unsustainable. While we have imposed anti-dumping duties on several products, a better way to apply pressure is to force China to accept payments in rupee after, say, the deficit crosses $20 billion each year. The rupee surpluses can be deployed in India to build infrastructure on mutually agreed terms.

Defence spending as a share of gross domestic product (GDP) has fallen below 2 per cent. Worse, due to heavy spending on OROP (one-rank-one-pension), the investments we need to make in military hardware are being postponed. India must commit to raising defence’s share of GDP to 2 per cent over the next five years, maintain it there for the next 10, and then allow it to taper down to a range of 2-2.5 per cent. This level of defence spending is vital to India’s ability to ward off any threat from China.

There are many other ways India and the world can corner China, but the basic message needs to be internalised: more than Pakistan, it is China that needs to be called out.