Originally Published 2010-07-30 00:00:00 Published on Jul 30, 2010
With a $4-trillion economy and laudable efforts at lifting 300 million people out of poverty, China today appears more socially cohesive than before.
Sweet-and-sour menu
The strategic implications of the Middle Kingdom's economic trajectory on regional and global stability is an enigmatic riddle that defies linear answers. It was the subject of an animated discussion on the sidelines of an International Conference of Asian Political Parties (ICAPP) on poverty alleviation, attended by functionaries of 55 political parties from 28 countries holding leadership positions in party hierarchies and government structures in China.

With a $4-trillion economy and laudable efforts at lifting 300 million people out of poverty, China today appears more socially cohesive than before. However, with an economic model that continues to be export-driven, with foreign trade accounting for 68.5 per cent of the GDP as per 2008 World Trade Organisation numbers, the consequences of a sluggish American economy and some serious belt tightening in the Euro-zone begs the obvious question — does China have the internal capacity to absorb the output of its production processes given the continuing slowdown in the Western economies and coupled with an intrinsic thrift milieu and moderate wage structure.

While analysts contend that China may see an opportunity in the economic meltdown to further its

G-2 aspirations, the highest echelons of the Chinese leadership emphasise that the nation continues to be a developing country that has profound developmental challenges to surmount. In an interaction with the delegates to the ICAAP conference, vice-president of China Xi Jinping articulated that China aims at eradicating poverty by 2020 in line with the United Nations Millennium Development Goals (MDG) and augmenting existing infrastructural capability by 2050 to emerge as a developed nation in the Organisation for Economic Co-operation and Development (OCED) league. The sub-text of Xi Jinping's assertions was to assure the Asian audience that China's rise is peaceful and that the Asian nations will benefit from it.

The inherent contradiction manifests itself when the development narrative is contrasted with China's burgeoning defence budget and an aggressive search for equity oil and natural resources around the world, thereby raising red flags in establishments charged with assessing the direction of Chinese Comprehensive National Power (CCNP). Independent assessments estimate China's defence budget for 2010 to be around $90-120 billion, substantially more than the official figure of $77.95 billion. This can't be put down to a factor of inflation in the present economic scenario. Moreover, China has one of the largest standing defence forces in the world.

But if you evaluate the regional landscape from a threat perception point of view, there is nothing substantive that can validate this defence dynamic, especially when the leadership emphasises that developmental priorities are uppermost in the pecking order.

Then, does India have anything to be concerned about, given the differing perceptions on a host of issues? There is the obvious spectre of existing and prospective Chinese naval and submarine bases stretching from Sanya in the South China Sea, traversing Hambantota in Sri Lanka, Marao in Maldives to Gwadar in Pakistan — the ubiquitous string of pearls encircling India. These naval bases can exercise oversight over the Sea Lanes of Commerce (SLOC) that are pathways of Intra-Asian energy flows from the West to the East. Given that China is the largest consumer of oil in the world and that it would be dependent on hydrocarbons till at least 2020, it can't wish away the import of the sea routes, though it's going to considerable lengths to surmount its Malacca dilemma.

Evaluated in the context of the conceptual shift outlined in the Sixth Chinese White Paper on defence, released in January 2009, from strategic counter attacks to strategic projection operations, it does raise the obvious question: does this heightened presence underscore just energy security anxieties or is it reflective of China's desire to acquire just strategic dominance of the SLOC or a more visible presence outside its sphere of conventional interest?

While enhancing trade to $80-100 billion by 2020 and increasing civilisational equities and other multilateral linkages in the region may create both a robust hedge and a sense of equilibrium to offset divergent strategic priorities, China would continue to remain among India's foremost strategic dilemmas in the 21st century. Does India have the intellectual capacity and structures to engage in the rigours of a dynamic multi-layered and nuanced relationship?

Manish Tewari is a lawyer and an MP, the views expressed by the author are personal.

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.