Money, Machinery, And Military: How China Plans To Become The ‘Supreme Leader’ Of The World 

All warfare is based on deception: Sun Tzu in The Art of War

‘The Art of War’, one of the greatest books ever written on military strategy, and perhaps, China’s greatest literary export to the world, is one that warrants urgent reading for diplomats, economists, technocrats, and military generals across the world eager to garner a better understanding of China’s global pursuits.

Under Jinping, and unlike Nazi Germany or the other great empires in the last thousand years, China is employing warfare tactics from a book that is almost 2,500 years old.

In late 2019, Jinping’s biggest concern was not the virus, not even remotely, but the trade war with the US, the protests in Hong Kong that had garnered attention from the world and people in mainland China.

Meanwhile, concerns around Huawei, adventures and misadventures in the South China Sea, and a record low GDP growth were threatening to disrupt Jinping’s limitless stay as China’s President.

There are always opportunities in the midst of chaos, one of the chapters in the book states, and Jinping has been practising that lesson, globally, since March 2020.

As the pandemic moved from China to Europe and then to the United States while spreading across Asia, South America, and Africa, Jinping employed the combination of distraction, deception, and division, also known as Satan’s 3 ‘Ds’ in some religious schools to accelerate China’s aim of being a global dictatorship.

The distraction began back home as the country shifted its focus from a stagnant economy to battling the outbreak, especially in Wuhan.

The deception followed with Jinping’s mask diplomacy aimed at Europe, and the consequential division has been ushered as the trans-Atlantic alliance finds itself fractured.

From the possibility of being consumed by the virus in February 2020 to asserting itself merely three months later, China, for starters, has started remarkably well on its path to becoming a global hegemony.

The Motivation

It would be a mistake to attribute China’s dictatorial tendencies to the outbreak of the coronavirus, for they were on this path long before the world was acquainted with the possibility of a China-led global order.

However, the great financial crisis of 2008 and the alleged outbreak of the virus in China’s Wuhan have put this pursuit in hyperdrive.

China’s aim to be a global dictatorship stems from the events that occurred between 1839 and 1949, known in the mainland as the ‘Century of Humiliation’ when the country lost both land and lives to the imperial empires of the day, mainly the British, Russians, and Japanese.

From the first opium war in 1842, where China was forced to surrender Hong Kong to the British as a treaty port to the second Sino-Japanese war that began in 1937 and last until the end of the Second World War in 1945, the 100-odd years are viewed by China as the lost century, and thus, they see themselves as the rightful imperialists of the 21st century.

To further its ascent, an ascent the Chinese believe is both unstoppable and inevitable, Jinping has begun tightening its grip on the world using its economic strength (money), technology and manufacturing (machinery), and its growing military force.

While this ascent has been understated, fancily wrapped and sugar coated in limitless lending, infrastructure projects, digital exports, foreign acquisitions, theft of intellectual property in the garb of business regulations, and unseating of the post-1945 global order in the UN, the objective has been unapologetically made public, that of China being a global leader (read dictator).

The Money

As the British taught the people of the Indian subcontinent, the route to complete political annexation of any nation must pass through its economic colonisation.

Firstly, the Belt and Road Initiative. China is pledging investments amounting to $1.25 trillion worldwide, more than 12 times the cost of the Marshall Plan.

In Sri Lanka, China started with the aid of $37 million in 2005 after India and the US refused to offer any help to the ruling government.

By 2008, the aid had increased to $1 billion. In 2013, a $1.4 billion plan for the Hambantota Port was put into play.

Between 2005 and 2012, China had issued $5 billion worth of loans to Sri Lanka, at a rate higher than that of the World Bank.

Eventually, China won a 99-year lease of the port as Sri Lanka struggled for debt-relief.

Pakistan, another strategically important nation for China to connect to the Middle East and Africa, finds itself under an unpayable mountain of debt due to the $60 billion China-Pakistan Economic Corridor.

As per some estimates, Pakistan already owes $15 billion to the Chinese government and another $6.7 billion in Chinese commercial debt.

Some estimates put the debt owed to China around $19 billion, or a fifth of the total external debt.

However, the BRI extends as far as South America. From 2015 to 2019, Chinese investments are projected to be at more than $250 billion along with another $500 billion in trade.

Already, for Brazil, Peru, Chile, and Argentina, China is the largest trading partner.

With the Covid-19 outbreak now moving to South America, unable to service their debt obligations could result in many countries falling into China’s debt trap.

A similar story will play out in Africa.

China is the largest lender to Africa and holds about one-fifth of the total debt in Africa.

For countries in Africa, especially the petrostates, the trouble is on two fronts.

One, the virus, and two, the tumbling oil prices.

China, between 2000 and 2018, advanced more than $140 billion in debt to many African nations.

However, routinely, they have been working on restructuring these loans by either negotiating the terms of payment or the duration of it.

In some cases, it has waived off the payment too like in 2018, it cancelled Cameroon’s US$78 million debt, Botswana’s US$7.2 million debt and US$10.6 million owed by Lesotho, and the previous year it cancelled US$160 million owed by Sudan.

Of course, the waivers will come at a cost, which could enhance China’s political interference in the internal affairs of these countries.

Two, the Chinese have been actively shopping in Europe as well. Recently, the Chinese diplomats got European Union’s disinformation team, in one of their reports, to dilute the part that blamed China for shifting the blame of the virus outbreak to a disguised disinformation campaign.

The intervention had come from Beijing.

The helplessness on the part of the Europeans, struggling to keep the European Union together after Brexit and still grappling with the aftermath of the 2008 crisis, can be attributed to massive Chinese investments in the region.

China, since 2007, has invested more than $318 billion across Europe. Investments by state-owned enterprises of China alone constitute more than $165 billion worth of investments.

The United Kingdom saw more than 220 deals of around $70 billion, Italy and Germany had deals worth $31 billion and $20 billion respectively, across sectors ranging from technology to airlines.

Other states also have fairly high levels of investments. China has investments worth $5.8 billion in Norway, $7.3 billion in Sweden, $2.1 billion in Greece, $13.4 billion in France, close to $7 billion in Spain, around $8.6 billion in Portugal, and $9.2 billion in Finland.

In what can be termed as one of the biggest deals in Europe, China National Chemical Corp announced the takeover of pesticide manufacturer Syngenta AG, based in Switzerland, for $46.3 billion in 2016.

Across Europe, since 2007, close to 360 companies were taken over, and partial or complete ownership was extended to four airports, six seaports, and 13 professional soccer teams.

Even in India, the Chinese have been on an investing spree, putting in money in unicorns that can rival the companies of the West.

Last month, a 1.1 per cent acquisition in HDFC bank, led to the Government of India amending rules that govern foreign direct investment into India from China and Hong Kong.

Even European nations announced similar measures.

Three, by threatening to cut off access to the domestic market in mainland China. To give one example, Australia, which irked the Chinese by calling for an independent inquiry into the origins of the virus outbreak.

The Chinese responded by barring meat imports from four slaughterhouses in Australia for reasons they called ‘technical’.

Additionally, tariffs of more than 80 per cent were slapped on Australian barley, a key Chinese import, earlier this week.

The buck has not stopped here, for China is considering additional import tariffs on a number of goods including seafood, oatmeal, and fruit by putting them through stricter quality checks, anti-dumping probes, and custom regulations.

The move could hit Australia’s economy, given China is their biggest trading partner, accounting for a third of their exports.

The same move has been used by China against companies of the West, especially the ones who have threatened Chinese interests in Taiwan and Hong Kong.

The long list of companies and groups includes NBA, Disney, Apple, JW Marriott, Lancome, Tiffany, Cathay Pacific, Air Canada, US’ Delta Airlines, Gap, Zara, Dolce & Gabbana, Union Bank of Switzerland, Mercedes-Benz, and Lotte from South Korea, to name a selected few.

The access to the domestic market is used by China to get companies in the West to toe the government line.

Even during the US-China trade war, companies with significant business interests in China raised their voices against President Donald Trump and not China, even though the latter has ushered trillions of dollars worth of intellectual property theft in the garb of business regulations.

Many enthusiastic observers are betting on companies to leave China for better pastures in India and South-East Asia.

However, the massive infrastructure network in China coupled with their market, and upcoming investments in infrastructure, both in the mainland and BRI nations in Africa will make it hard for many companies to leave China, especially when it comes to supply chains for the future.

To give an example of Japan, which had set aside a monetary corpus of around $2 billion to help companies relocate back to Japan or elsewhere from China.

Eventually, many companies turned down the decision, citing increased labour costs, future tariffs and import duties, the large market in China, and relations with Beijing.

The lack of bureaucratic norms and red taping that cripple countries like India are also a blessing for companies operating in China.

Also, it must be noted that China was the first country to get its factories going, manufacturing PPE kits for Europe and ventilators for the United States, and therefore, companies will need more than merely Trump’s rant on Twitter to exit China.

Aiding Europe with medical equipment, China increased its daily output of protective clothing from less than 20,000 pieces to more than 500,000 pieces in March. Production of N95 masks reached 1.6 million from a mere 200,000.

Each day, China was producing more than 100 million ordinary masks.

Thus, China may lose some companies to other countries, but the big guns will choose to be with them while diversifying some of their supply chains.

As Sun Tzu says in ‘The Art of War’, the good fighters of old first put themselves beyond the possibility of defeat and then wait for an opportunity to defeat the enemy.

With these massive investments, across the world, in critical markets including that of India, China is already moving beyond that realm of defeat.

(This is the first article in a four-part series on China’s emergence as a global dictatorship and its consequences on the economic, technological, and military front. The later parts will focus on China’s tech and military capacities).