The 21st century is facing triple crises and China is the common factor underlying all three.

 

The world is faced with triple crises—geopolitical power shifts, global health crisis and economic depression. China is the common factor underlying all three. These crises would collectively shape world politics, restructure global supply chains and bring an end to unregulated globalisation. The contours of the post-Wuhan world order are yet to take shape, but it is likely to be as divided and a bifurcated world as the post-World War II world was.

The Covid-19 has served to accelerate the breakdown of the post-World War II international order. We are entering Cold War 2.0 with eyes wide open, not sleep walking into it, as some would argue. The vast Indo-Pacific region from the Western Pacific to the Western Indian Ocean is now the “ground zero” of this new Cold War 2.0.

Every crisis has winners and losers. China certainly emerged as a winner from the 9/11 terrorist attacks and the 2008 global financial crisis. The world’s worst pandemic will also have winners and losers. There are two possible scenarios. Either China would emerge from the triple crises—power shifts, pandemic and economic recession—as a relatively more powerful country than others (e.g., the United States, Europe and India); or, China would emerge as a bruised and much weakened power in a post-Wuhan world that is multipolar but fragmented with a more regulated type of“guided globalisation”.

As for Beijing’s One Belt One Road (OBOR) megaproject, the pandemic-induced economic shock throws a huge spanner in the works as the world rethinks its economic dependence on China. Even before the pandemic, the Belt and Road projects had lost sheen.Chinese investments seemed to generate as much ill will as goodwill.Whether Beijing can now deliver on the projects will depend on China’s own economic recovery. The pressure to provide debt relief by either reducing loan interest rates or suspending interest payments for Myanmar, Cambodia, Pakistan, Djibouti, Sri Lanka, or Kenya would take its toll on China’s fiscal situation. History shows that grandiose infrastructure schemes have often caused empires to falter and founder.

At any rate, China’s economy is particularly susceptible to declines in foreign investment, technology controls, and export markets. Tokyo and Washington are now providing financial incentives to shift manufacturing out of China. A prolonged economic slowdown caused by the pandemic, war or natural disasters, potentially made worse by the “Chiexit” (the exodus of multinational corporations from China), could even threaten the stability of China’s one-party regime.

Some China-experts may write treatises justifying the rationale behind China’s predatory predilections, but Beijing is motivated by baser instincts: larger territory, absolute power, and obeisance from all. As China’s power has grown, Beijing’s visionhas evolved from a multipolar world to a bipolar one and then to a unipolar Sino-centric order underpinned by Chairman Xi Jinping’s imperial OBOR overreach.Beijing’s growing might has strengthened the hold of traditional notions of hegemony, territorial expansion, Han supremacy and tributary relationships.

Manufacturing disputes where none exists is an old tactic. China’s new territorial claims on tiny Bhutan’s eastern border illustrate the point. Beijing’s strategic opportunism and attempts to shift the territorial status quo amidst a global pandemic all along its periphery have reinforced historic fears about the Middle Kingdom’s “insatiable lust for territory” and its image as a perennial “creeping aggressor”. Given its staunch anti-colonialism, India cannot endorse Chairman Xi’s vision based on the 11th century tributary system, 15th century maritime expansion, 18th century territorial expansion, 19th century mercantilism and 20th century gunboat diplomacy.

Beijing also has a history of engaging in brinkmanship andlashing out at neighbours in times of domestic crises.Historically, no country has spent so much for so long on its military and not gone to war. The Chinese military needs to test its new capabilities and war-fighting doctrines. Chairman Xi is beholden to “wolf warrior” generals and admirals who are itching for a fight to give a bloody nose to one of China’s weaker neighbours, and thus herald China’s arrival as a powerful military power. Col Qiao Liang, a military theorist and co-author of Unrestricted Warfare (1999), recently opined: “…we must strike quickly and contain the scale in a small and mid-sized war aimed at causing pain to our opponents and hence gaining respect via small wars.”

Xi seems in a rush to realise his “Chinese Dream” and lock in China’s geostrategic and geo-economic gains. Beijing’s aggressive posturing is aimed at subduing an ageing Japan, exposing limits to America’s declining power and diminishing India in the eyes of the world—as a prelude to establishing China’s global supremacy. Not surprisingly, Beijing’s attempts to establish a Sino-centric order are opposed by the Quadrilateral grouping of democracies (comprising the United States, Japan, India and Australia) and others whose interests lie in keeping the Indo-Pacific multipolar where Chinese power is balanced by continued US power and presence and those of other Asian states.

The vastness of the Indo-Pacific makes it inherently multipolar and naturally resistant to Beijing’s design to turn it into a unipolar Sino-sphere of influence. Most countries want to profit from China, even though they do not see the “China Model” as politically or culturally attractive. Even small and poor countries are jealous of their sovereignty.

Historically, small states are the first to experience the impact of major shifts in global geopolitics. Usually “the bit players” on the periphery of rising powers, they play a disproportionate role in triggering crises and wars, especially at turning points during power transitions. More often than not, small states’ attempts to extract benefits by playing one off against another boomerang as they fall prey to intervention by external forces to influence and shape domestic political outcomes to advance their own vested interests. Nepal and Sri Lanka are two prime examples.

Economic engagement with revisionist powers like China has strategic consequences and causes domestic political reverberations. Just as industrialising European powers’ quest for resources, markets and bases led to the colonisation of Asia, Africa and Latin America in the 18th and 19th centuries, China’s quest for overseas resources, markets, and bases now poses challenges to the sovereignty and independence of small and weak states. Beijing is increasingly using its economic heft to influence other countries’ domestic politics and shape foreign policy behaviour in its favour.Small states cannot say “no” to China owing to heavy indebtedness to Beijing and “elite capture” (Beijing bankrolls election campaigns of major political parties, scholarships for elites’ children, lavish gifts, military exchanges, arms sales, and high visibility infrastructure projects).

Despite their proclivity for hedging, small countries will find their room for manoeuvreseverely constricted,and navigating troubled waters extremely difficult due to the triple crises of the early 21stcentury. Significantly, the pressure to pick sides would come more from Beijing than Washington. Much like nonviolence, the Chinese mind cannot fathom the notion of nonalignment. As Yan Xuetong, a prominent Chinese strategic thinker, points out: “Nonalignment has a Cold War mentality, while forming alliances is simply human nature since ancient times.” Already, China’s economic embrace has had troubling, unsettling consequences for foreign policy and domestic politics in the Solomon Islands, Malaysia, Cambodia, Myanmar, Nepal, Sri Lanka, the Maldives and Kenya.

All this will lead to a bifurcated world of clashing visions and competing rule sets: in politics, economy, technology, maritime, space and cyber domains. A clash of values and visions is on. On one hand is the Sino-centric OBOR vision of a world based on power-and-hierarchy. On other side is the law-and-order based Free and Open Indo-Pacific vision.

Western, Japanese and other multinational corporations will reduce their dependence on China to avoid the collateral damage. China’s mercantilism, its worldwide quest for resources, markets and bases,and attempts to carve out a Sino-sphere of influence will now face intense opposition from the United States, and its allies and partners.

The world is now transitioning from globalisation to regionalisation of trade. Rival trading and technology blocs will emergein the era of regulated or “guided globalization” where national governments would try to regulate the flow of goods, services, finance and labour in strategic sectors to safeguard nation interests. As economic issues get mired in domestic politics, trade and technology would become contentious and explosive issues. Economic polarisation will sharpen political differences.

Tech wars over artificial intelligence, big data, robotics, biotech, 5/6G would result in a bifurcation of the global economy or usher in “One World, Two Systems”. Two separate blocs—driven primarily by national security concerns, not merely economic or commercial interests—wouldcreate a fragmented, bifurcated world of conflicting visions and competing rule sets in politics, economy, technology, and in maritime, space and cyber domains.

The forces of geopolitics, ideology, nationalism, economic and technological competition will strain relations amongst nations. Countries—big and small—will be forced to choose sides. Fence sitting will become difficult. To avoid coercion or collateral damage, most countries would prefer to trade with economies where interests and values converge. This will have the effect of locking them into long-term political relationships with technology providers from one or the other bloc.

The contest for the allegiance of small island states fromSamoa andSolomon Islands in the Pacific toSri Lanka and the Seychelles in the Indian Ocean is part of a bigger geopolitical power game in the Indo-Pacific.The intense jockeying for influence and forward presence amongst major maritime powers over control of ports, logistical facilities, and other pieces of critical infrastructure along the vital sea lanes will create new friction points. Armed with the world’s largest naval fleet, China seems determined to become a resident power in the Indian Ocean and beyond, just as Britain, France and the US became resident powers in the 19th and 20th centuries.If India backs off or acquiesces in any confrontation with Beijing either in the Himalayas or in the Indian Ocean, the littoral states on its periphery will quietly slide into China’s orbit and a new Sinocentric order would emerge in the region.

As partnerships and allegiances among states shift, new strategic balances, new institutions, and new norms will emerge. A multilayered complex web of security partnerships is emerging in the Indo-Pacific. Pressure will grow to reform old institutions (such as the United Nations, the World Health Organisation,the World Trade Organisation), and form new ones. A case in point is an informal US-led grouping, dubbed the “Quad Plus”, to coordinate their responses to the pandemic that includes India, Japan, Australia, Vietnam, South Korea and New Zealand. The G-7 is likely to turn into D-10 (i.e.,a concert of ten democracies), and the Quad intoiQuad (inclusive Quad). The BRICS (Brazil, Russia, India, China and South Africa grouping) might fall apart and be replaced by what Sushant Sareen calls aPRIC (the Pakistan-Russia-Iran-China axis).

In short, the next 10 to 20 years in the Indo-Pacific are fraught with risks and challenges. This is where some of the world’s most powerful states are on the look-out for small and middle powers to forge new alliances, establish pliant regimes to gain access to resources, markets and bases, while perceiving peer competitors with hostility and engaging in arms races. Map making seems to be the new fad in Asia. Following China’s example, Nepal, Pakistan, Afghanistan and others are keen to re-draw their boundariesfrom the Durand Line to the Nine-Dash Line. For China’s neighbours that have unresolved territorial disputes and alliances with Beijing’s enemies, this is the decade of living dangerously. With Cold War 2.0 intensifying, revanchist and irredentist tendencies growing, andmajor economies decoupling, the outbreak of a conflict either in the disputed Himalayas and/or in the Western Pacific cannot be ruled out.Welcome to the post-Wuhan world disorder.

Mohan Malik is a Sinologist and visiting fellow at the NESA Center for Strategic Studies. He is the editor of Maritime Security in the Indo-Pacific and author of China and India: Great Power Rivals. An earlier abridged version appeared in The Strategist. The views expressed in this article are his own.