India Doesn't Matter to China Much Beyond Provocations, Only the US Does

The bottom line of Xi Jinping annual New Year speech for 2022 was that the China must have “determination” maintain a “strategic focus” and look out for “potential risks” in the coming period. A week ago, the Communist Party of China’s (CPC) highest policy-making body, the Politburo had noted that since Xi became chief in 2012, the country had faced “complicated and grave circumstances… and the arduous tasks it has undertaken are rarely seen in the world.”

The bottom line of Xi Jinping annual New Year speech for 2022 was that the China must have “determination” maintain a “strategic focus” and look out for “potential risks” in the coming period.

Now Xi, who is seeking a third term as the General Secretary of the Communist Party of China at the 20^th National Congress that will take place later this year, is bracing the Party for what could be more difficult days ahead as the country faces a climate of economic difficulties for China, compounded by the ongoing COVID pandemic and tensions with the US.

Xi struck a personal note in his New Year address saying that having worked in the countryside (where he had been forcibly sent for seven years in the mid-1960s) he knew what poverty was all about. But, in his recent inspection tours he had found that people who had once lived in poverty no longer have to worry about food, clothing or access to education, housing and medical insurance.

Tibet Remains Important For China

From this year onwards, the target is 2049 the second centenary—the founding of the People’s Republic of China in 1949—when China hopes to reach the level of rich countries.

There was no special reference to any foreign country in his short speech, though there were references to Hong Kong, Macau and Taiwan. Xi himself has not left China since the onset of the pandemic, though he has participated in meetings virtually and also traveled extensively within China.

In July he made his first visit to Tibet as President. He began the trip from Nyingchi, a place close to the Chinese border with India and met Chinese officials and military personnel in Lhasa. This was an important visit and in line with Xi’s policy diktat on the need for stability, development, ecology and border area consolidation in Tibet, all of which have implications for India.

China-US Ties Stable For Now

Relations with the United States have become more stable since the virtual meeting between Xi and Joe Biden on 15 November. There were no major breakthroughs, but the very fact that they talked was significant considering the sharp deterioration in China-US ties since 2020, the last year of the Trump presidency.

Xi himself has not left China since the onset of the pandemic, though he has participated in meetings virtually and also traveled extensively within China.

For the Chinese, the big takeaway from the meeting was the US reiteration of its “one China” policy where the US acknowledges Beijing’s view that Taiwan is part of China, but does not endorse the CPC’s claim over the island and maintains close, but unofficial ties with it.

Given the importance of 2022 to Xi’s political agenda, his emphasis is on minimising risks and maintaining stable ties with the US and, to use an analogy used in the summit, putting up guardrails to prevent any unforeseen incident derailing their ties.

Domestic issues will also be the focus of the Biden Presidency as it seeks to break the downward spiral of the President’s job approval in the country. Biden faces the mid-term elections in the country in November amidst criticism of his handling of the COVID pandemic, as well as country facing the highest inflation levels in 40 years. There could be a temptation for Biden to raise the rhetoric against China to deflect attention from his domestic situation.

Xi's High-Handedness Has a Price

2022 may see a further ascent of Xi, not only as General Secretary of the CPC and President of the PRC, but as a political personality in the CPC’s pantheon next only to Mao. But his rise, which has come with an unprecedented tightening of the CPC’s authority over all aspects of the life of the country, may have the seeds of its downfall.

Already there is criticism of Xi’s foreign policy whose assertive and confrontationist stance alarmed the US and EU. This has led to an unprecedented American technology embargo and the refusal of the EU to sign the Comprehensive Agreement on Investment that had been arrived in December 2020.

There is criticism at the somewhat heavy-handed manner in which the Chinese authorities have sought to restructure and regulate the Chinese economy. Entire sectors have been gutted. By the end 2021, Alibaba had dropped from the list of top ten companies in the world and Tencent was at number 10 position.

Other private sector technology giants like Didi, Meituan, Baidu, Sina have all been hit by fines and government regulations restricting their business. Xi’s slogan of “common prosperity” may resonate well among the mass of Chinese, but the crackdown on China’s private sector giants, many of which were founded by entrepreneurs, will come with a price.

China Not in a Hurry to Resolve Conflicts; Business As Usual with India

However, as of now, China remains one of the world’s fastest growing economies in the world with GDP slated to grow to 8.1 per cent in 2021, but this could slow down to 5.1 per cent 2022. Troubles have been aplenty in 2021—power shortages hit the country, along with shutdowns related to COVID and supply chain disruptions. The real estate sector which contributes 20 per cent of the Chinese GDP remains crisis-ridden and then, of course, there is the crackdown.

Xi’s slogan of “common prosperity” may resonate well among the mass of Chinese, but the crackdown on China’s private sector giants, many of which were founded by entrepreneurs, will come with a price.

The Chinese, as is famously known, view their global outlook on the basis of hierarchy. Here, the US is number one, and in some ways no one else matters. This becomes clear when you read the lengthy New Year message of Wang Yi, the Chinese foreign minister. In the current hierarchy of things, issues relating to Russia occupied the top slot.

Wang’s tone with regard to the US was combative and defensive at the same time. As for EU, Wang continued to present their relations in a positive light, even though the EU is now far more skeptical of the Chinese project.

Down the list were the neighbours beginning with ASEAN, followed by Central Asia and Japan. And then came India with whom Wang claimed China had “effectively managed and controlled frictions in certain border areas”.

New Delhi has not said much about this, but the exchange of sweets at several points along the LAC on New Year Day and the booming Sino-Indian trade in 2021 tells its own story. As does the PLA’s Galwan ceremony. The Chinese once recognised this as disputed, now they claim sovereignty over the area and back it up with a new national law. So managing and controlling frictions may be fine, but it doesn’t look like we are too close to permanently resolving them.

Only the US Matters to China

Wang also listed the challenges China confronts in 2022, number one being the need to have successful conclusion of the 20^th Party Congress, followed by the Beijing Winter Olympics. The most significant challenge is to protect China’s core interests, primarily “China’s sovereignty and territorial integrity”(read Taiwan).

Importantly, among the challenges listed is the importance of bringing “China-US relations back on the right track.” Beijing understands clearly that today while it can ignore the rest of the world, there is one country, whether dysfunctional or divided, can still play the key role in the unfolding of its future.

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This commentary originally appeared in The Quint.