China in 2023: Dragon bid to jack up cost of global economy

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By Manish Anand

New Delhi, December 30: China is struggling to hide its horrendous bid to arrest the Coronavirus by locking up the people and the consequent deathly trails, leaving ashes of dead in polythene for their relatives to pick up. China is also chiding the global community for restricting the inflow of the Chinese people after Beijing freed all international travel restrictions even while the country is in the midst of a Covid tsunami.

China in 2022 gifted the world a supply side inflation by willfully disrupting the global supply chain, and the experts concur that the dragon would only raise the scale in 2023 to dictate terms in the world affairs. For most part of the year, China enforced ‘Zero Covid Policy’, which restricted the movements of the people, locking them up in their homes, while lockdowns had been the norms. Only at the end of the year, China abandoned the ‘Zero Covid Policy’, calling it an adjustment, to export the virus to several countries such as the US, Japan, South Korea, Italy, which now are restricting the ease of travel.

Dan Blumenthal and Derek Scisssors, while writing in The Atlantic, argued that China is resorting to the new tactics in using economy as the means to serve its strategic aims. “…a profound change in the economic component of China’s geopolitical strategy…will be neither the world’s low-tech factory nor its leading tech pioneer, but will aim instead to make itself indispensable as a producer of high-value goods upon which even its adversaries depend,” they wrote in a column.

Since the outbreak of the pandemic in 2020, China’s President Xi Jinping has been adjusting the strategies in line with his planned bid to take a third term and also insuring that he would remain in power for a life term. He scripted the collective leadership model of China to usurp the full scale power in his hands by raising a loyal People’s Liberation Army (PLA), which is known to be at the forefront to purge the critics. Since 2020, as part of the script, Xi had been building on the hyper nationalism to deflect the attention from a sinking economy and growing crowd of the critics by harping on the rhetoric on Taiwan, and also picking up quarrels with India on the Line of Actual Control (LAC).

Ashutosh Varshney, a professor of international studies at Brown University, also argued in a column that under the command of Xi China is according primacy to security over economy. He quoted from an article jointly written by three Chinese scholars – Margaret Pearson, Meg Rithmire and Keilee Tsai. They have unraveled Xi’s economic model wherein the authors have described how security and economy in China are intermingled. It has been well known that the Chinese Communist Party controls majority of the private companies, which have become too large to cause security implications for the US and the other countries.

Dan Blumenthal and Derek Scisssors have argued that Xi is now aiming to “minimize China’s dependence on other countries and maximize its ability to coerce them economically”. They cited the instances of electric vehicles, stating that “China owns substantial overseas reserves of lithium and cobalt and is rushing to add more. It also seeks to become the premier processor for these minerals. Green-energy equipment may be made elsewhere, but it will rely on Chinese materials. In biopharma, China dominates the production and export of basic pharmaceutical ingredients and is looking to expand final manufacturing of pharmaceuticals.”

The commentators’ analysis is aligned to widely held view that the western world barring Germany is seeking to decouple their economy with China, as the US, the UK, France, Canada and other countries seek diversified global supply chains. A report a few weeks ago had shown that the flow of the FDI in research and development originating from the US has dried up in China, as they are showing more interest in India.

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