Xitler Isn’t Going Down Like Hitler; To Stare Him Down, Trade Should Be The World’s Weapon Of Choice

A foreign ministers’ meeting of the Quad, the four-nation bloc comprising the US, Japan, India and Australia, sent a strong message to that rogue entity called the Chinese Communist Party (CCP) on Tuesday (6 October). At the same time, it also sent an additional signal, that the US and Asian members of the Quad have differing approaches to the problem of dealing with China.

While US Secretary of State Michael Pompeo was upfront in calling out China, the other three failed to name China, speaking about it in elliptical terms. Pompeo said, “it is more critical than ever that we collaborate to protect our people and partners from the CCP’s exploitation, corruption and coercion. We have seen this in the South, in the East China Sea, the Mekong, the Himalayas, the Taiwan Straits.”

The tone was different with the other three members. The Japanese talked about developing a common vision for a “free and open Indo-Pacific”, and India about the need for “upholding a rules-based international order. The Australian foreign minister talked about the Quad having a “positive agenda”, reports Mint.

Where there may be substantive agreement between members of the Quad in trade, where at least three members, the US, Japan and India, have quietly decided to move trade dependence and supply chains away from China.

Trade is where the Quad can and should confront and contain China. It is the least damaging among many options.

India has already banned certain Chinese-owned apps and has chosen to vet Chinese investment projects most closely. It has put in place a production-linked incentive scheme to get companies to shift production bases to India under Atmanirbhar Bharat – an umbrella term meant largely to get more military equipment produced locally and to get key players in electronics and active pharma ingredients to Make in India (which is code for lowering China dependence).

Japan is offering incentives for companies to relocate supply chains outside China, and Australia is also trying to figure out how to reduce its China linkages after being subjected to state-supported cyber-attacks from Dragon country.

The US under Trump has, of course, been escalating a trade war for years, and has recently extended sanctions and penalties on Chinese companies.

If the Quad has, separately, done much to call out and impose economic costs on China for hostile acts against its neighbours and trade partners, and is yet hesitating to act more boldly in unison, the reasons for the ambivalence vary from country to country.

For the US, which is a Pacific power, putting a check on Chinese domination in Asia is critical. It thus has military (mostly naval), economic and cyber security interests at stake. But it faces no direct military threat from China. And, having actively disengaged from many military conflicts of the George Bush and Barack Obama years, it has no reason to contest China militarily beyond a point.

Japan and Australia face economic and cyber threats from China, but it is unlikely that China will ever escalate conflicts with them to the military arena. So, neither has an interest in provoking China beyond a point.

In the case of India, we face a triple threat: actual possibility of a military conflict, a trade conflict, and cyber-warfare. We are vulnerable on all fronts, though militarily we can give them a bloody nose. But we have even less of a reason to provoke a military conflict right now, when we are down on the economic front.

Most significant, the country that really faces a military and economic threat to its existence from China is Taiwan, but it is not even mentioned as a potential member of the Quad.

Even in the US, the Democratic party is more likely to try and heal its rupture with China, which makes it riskier for the other Quad members to do anything that will end up in military, cyber or economic conflicts that nobody can win.

While the whole of Europe and most of Asia (barring Pakistan and North Korea) are clear that China is no cuddly teddy bear, no one wants to confront it. If you leave out Donald Trump, most of the world (including India) has been extraordinarily nice to China, never mind how badly it behaves with them. This is, of course, basic human behaviour. When faced with a loud and muscular bully, very few stand up to it.

The world did not stand up to Adolf Hitler when he started militarising post-First World War Germany, or when he swallowed up Austria and a part of Czechoslovakia. It was only when he invaded Poland that the world could no longer afford to ignore the new thug who was threatening everybody.

When the US was obsessed with the Soviet Union, and later the non-existent “Russian” threat, it was over-sweet to China, and allowed it to break every norm of economic behaviour – from currency manipulation to intellectual property theft to adoption of non-tariff barriers and predatory export pricing.

India was no different. Jawaharlal Nehru, of course, allowed the Chinese to swallow Tibet without a murmur, declined a UN Security Council seat in favour of communist China, and sent his soldiers to war in 1962 without proper woollies or ammunition. Recently, Narendra Modi, after standing up to China in Doklam, has tried hard to be nice to Xi Jinping in bilateral meetings – to his eternal regret, as China repaid his friendliness with hostility.

The problem is, unlike Hitler, Xi Jinping (Xitler) is on a stronger wicket. Hitler did not have the atom bomb or the military might to take on so many great powers all together. China not only has nuclear weapons, but also the conventional military might and the population numbers to thwart any concerted military threat to itself – excepting on the high seas, where American naval power still is vastly superior. If the US, India, Australia and Japan decide to block China on the high seas and restrict its sea access, they can do something to thwart the dragon.

But not much more. Even partial denial of sea access will not impact China much as it has enough land and other routes from which its economic power can be projected and trade can continue without too many barriers. This includes the Gwadar Port in Balochistan through Pakistan and Pakistan-occupied Kashmir.

To make matters worse, a Covid-impacted world may have no stomach to do even this, and its dependence on Chinese purchasing power may have grown over the last few years as China focused on internal consumption growth.

A McKinsey study last year, titled China and the World, written before China started baring its fangs over Hong Kong, Taiwan, India and much of its southern neighbourhood, had this to say:

“The relationship between China and the rest of the world appears to be entering a new phase. China’s economic miracle was fuelled by industry and investment, but today domestic consumption is the main driving force of growth. The country is becoming less exposed in economic terms to the rest of the world. However, reflecting China’s rise to being the world’s second-largest economy and its leading trading nation, the rest of the world is becoming more exposed to China. These shifts have been accompanied by trade tensions and rising protectionism in many countries, raising the question whether we have reached a point of peak integration between China and the world.”

The report raises the right question: have we a reached a point from where the world’s engagement with China can only fall?

The answer is a big yes. Xitler can’t be confronted militarily like Hitler was. He can only be sanctioned and isolated in trade, with the hope that the Chinese people will, at some time, realise that the cause of their increasing isolation is not the rest of the world, but their own autocratic party and its bosses.

This ought to be the Quad’s primary prong of strategic containment of China, apart from naval coordination in the Indo-Pacific region. Xitler cannot be defeated like Hitler; he has to be worn down economically like the Soviet Union was. The world has to brace for multi-year economic warfare. It should not blink first.