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Behind China's growing belligerence

By Arthur Thomas - posted Tuesday, 2 March 2010


The Chinese Communist Party appears to see the world revolving around China and its needs, rather than China being part of a global community with differing needs, priorities, protocols, and working relationships with one another.

Since mid 2009, the body language has changed and Beijing has become increasingly intolerant of and aggressive to domestic and international comment that does not comply with, or contradicts, the edicts of “the world according to Beijing”, where compromise is not an acceptable option.

This period also corresponds with Beijing's realisation that recovery from the global financial crisis will be long-term, and China's stimulus strategy is failing to achieve many key objectives, and inflation is on the rise.

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The anticipated leap in domestic consumer demand did not translate across China. Despite massive infrastructure projects and record steel output, unemployment and civil unrest continues to grow. Before the end of the first half of 2010 about 20 million new workers, plus 6 million graduates, will join a workforce growing faster than job opportunities. A substantial residual army of existing unemployed exacerbates the situation for 2010 and 2011.

The primarily hard line CCP finds itself in the unfamiliar territory of an increasingly more complex global economy where nations are turning inwards and focusing on solving their own domestic economic problems, relying less and less on China's consumer exports, and ignoring Beijing's demands to comply with China's wishes.

The increasing surge of nationalistic rhetoric in the media is also an indicator of new moves to implement the tried and proven CCP tactic of diverting the population's attention away from growing socio-economic problems. The dummy spits and rising rhetoric appears more like growing paranoia as nations and individuals ignore Beijing's edicts, demands and threats.

Global media is painting a picture that questions Beijing's influence on the domestic stage and a decline in China's global relations and influence.

The CCP and state media appear oblivious to the decline in China's global reputation. The true extent of the CCP's acknowledgment of its declining global influence and respect for its leadership however, was highlighted by the launch of China's version of CNN with a US$6.6 billion 24/7, multi lingual global multimedia facility promoted as "a respected global media giant to improve China's image worldwide".

Promoting its growing economic, industrial and military power and international influence via state media and censorship, Beijing has placed itself on a pedestal that appears to be on a weakening foundation.

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State media has been successful in promoting the reach and influence of China in global affairs domestically. A recent Chinese poll showed that 41 per cent see China as the world's leading economic power. Not revealed to those polled was the US GDP of US$14.2 trillion for a population of 308 million, against China's GDP of $4.6 trillion for a population of 1.3 billion.

2009 and 2010 has not been kind for mianzi (face saving) for the CCP. Intense state and global media coverage of Beijing's demands and grandstanding backfired as nations ignored the demands and threats; and complaints against China's dangerous exports and unacceptable trade practices continued to mount, and are now likely to include solar power.

The CCP relies on harsh strong military and police response to maintain control and suppress civil unrest. Throughout China's history, peasant revolts have brought down dynasties and kingdoms up to and including 1949.

In 2010, China is now a nation of 1.3 billion comprising 800 million peasants, widening rural urban wealth and health gaps, and plummeting confidence in the CCP. In the mind of the CCP, it is its worst nightmare; civil unrest that could trigger yet another peasant revolt. This time however, widespread civil unrest could signal a co-ordinated and externally supported ethnic uprising in Xinjiang and Tibet. With the potential prize of an oil rich Xinjiang, a weakened China may not receive the support of Islamic neighbours it may demand.

Tibetan's Buddhists may also find unexpected support from India anxious to have a non-aggressive northern neighbour and the problems along China's northern borders could decline without Chinese support.

Without China's demand for its oil, gas, minerals and lumber, Russia could also benefit greatly from a fragile China. This could translate into improved relationships with the CIS (Commonwealth of Independent States), security of its Far East, development of the Northeast Transport Corridors, replacing China as the negotiating power with North Korea, all of which would  strengthen its relationship  with Europe and the US.

China's strategy of stimulus-driven industrial and economic expansion to raise GDP to double-digit growth, based on infrastructure spending, has priority over reducing the continuing, widening wealth gap between rural and urban China.

Continuing official corruption involving land resumption, relocations and compensation is undermining support for the CCP in the countryside. As is the accelerated loss of arable land for urbanisation, industrialisation and infrastructure increases with ongoing desertification, community relocations, pollution, as well as shortages and contamination of water resources.

The major contribution of mega infrastructure projects to GDP is adding to pressures on Beijing. Relocation of populations affected by the Three Gorges Dam (3GD) and the South to North Water Diversion Project (SNWDP) far exceeded estimates, increasing demand for new farmland and housing for the more than 2 million displaced. Many affected by destabilised 3GD reservoir shorelines caused by the rising water level have experienced more than three moves, while others remain on dangerous ground awaiting outstanding compensation: costs continue to mount.

Intended consumers of SNWDP water are complaining about the prohibitive cost for raw water and cost of treating the low quality water for consumption. Local governments, short of water but in line for SNWDP water, now claim the final cost of water is prohibitive and see investment in seawater desalination as a more reliable and cheaper option.

CCP misdirection and credibility hits

Beijing's high media coverage of the government-led China Iron and Steel Association was intended to force the iron ore miners to capitulate to China's ore pricing demand: it proved to be a lead balloon. It not only divided China's steel industry, but redirected buying to the high price spot market. China responded with the arrest of Stern Hu and more media coverage on Beijing's assertions. We will hear more of Stern Hu who is likely to become the inevitable pawn in multiple international negotiation scenarios, some of which have no relationship to steel.

In a blaze of international and domestic media coverage, Hu Jintao launched China's US$6.6 billion version of CNN at China's Inaugural World Media Summit and invited the world media elite to make it an annual affair. Restrictions on discussion points and the appointment of China's propaganda chief to run new media group proved another lead balloon. There were no takers to host a second summit.

China's efforts at Copenhagen to assert its global influence on developed nations to achieve major benefits for itself, India and smaller developing countries not only bombed out, but worsened the plight of China's small developing nation supporters, especially those most in danger of early inundation by rising sea levels.

State media censored the international news of Google's threatened withdrawal from China and the substantial claims of extensive personal, corporate and government privacy invasion of internet users. Support for Google was yet another reflection of increasing impatience with China's abuse and cyber intrusion into individual and corporate privacy of the internet.

Extensive media coverage focused on Beijing's objections to the US supply of arms to Taiwan, and threats to withdraw Sino-US co-operation on key issues that could include Iran and North Korea. Washington ignored the rhetoric, but state media failed to report the response. China continues to provide arms and assistance to rebel groups along India's northern borders.

State media also reported Beijing's protest over the visit of the Dalai Lama to Washington and his meeting with President Obama; the media repeated China’s threats to suspend Sino-US co-operation on key issues and UN matters. Like Beijing's censorship of Obama’s comments during his visit to China, state media only carried Beijing's comments. Beijing prefers to portray the Dalai Lama as a splittist, ignoring the international recognition conferred on the man for his personal dedication and efforts towards finding peace.

The hits are starting to come thick and fast from major trading partners, as well as once-friendly neighbours and client states, now complaining about China's unbalanced bilateral dealings. The US, EU, Australia as well as Russia, India, SEA, African and Latin American nations are responding to China's imbalanced view and tactics in international trade and relations.

China's Non Interference Policy is appearing more a one-sided farce in which Beijing demands respect for China's wishes, while ignoring the wishes and independence of others, and rejects the idea that respect is earned and is not freely given or demanded.

China's support for nations that ignore the norms for a world seeking freedom from the fear of nuclear war, genocide and large-scale human misery, is seriously testing the patience of the developed nations that have until now, been supporting China.

CCP survival

Survival of the CCP is reliant on the population's perception of China as an increasingly invincible global power, one too powerful for any nation to defy. But if the west is afraid of China's power, what hope does its own population have in defying the CCP?

If the west continues to ignore Beijing's demands and threats, it translates into declining respect for the leadership and an overall decline in China's global influence. That begs the question of the ongoing confidence of the Chinese people in the government. Beijing would have to impose draconian censorship to take care of that!

How does China expect to gain respect, credibility or international acceptance with its growing churlish actions, unreliable data, and its one-sided view of world trade and global co-operation?

Leadership and policy changes

China's new technocrat leadership claims credit for reform, the stimulus package, and a return to near double-digit economic growth against global trends following the global financial crisis. The looming property bubble, the real level of debt, unemployment, rising civil unrest and industrial overcapacity are fuelling rumours that reforms are stalling and a factional divide is looming within the CCP.

Recent subtle and not so subtle swings in the CCP suggest growing disunity and a move backwards from reforms implemented on "well balanced scientific development" by Hu Jintao and Wen Jiabao.

Unusual events in the Zhongnanhai

Jiang Zemin's sudden and unannounced appearance in second ranking behind Hu Jintao and ahead of other politburo members on the rostrum at the 60th Anniversary celebrations, was not only unusual, it was unprecedented. Equal sized side-by-side photos, published the next day in The People's Daily was also unprecedented, and not meant to be interpreted as a simple courtesy to a retired president.

Despite his placement on the podium, Jiang holds no official position, yet also appeared on state media TV 22 times during the celebrations. Placement in the leadership group is a statement about ranking, and intended to send a clear message. While Hu Jintao may be the Chairman of the CCP's Central Military Commission, Jiang Zemin wields the influence in the powerful upper echelons of the Commission, the CCP, and Politburo.

A sign that the technocrats may be losing ground are rumours that the Xi Jinping's succession may not be as certain as first thought. Hu Jintao, Wen Jiabao and their technocrat support base could be confronting the powerful old guard Shanghai faction.

State media is the guide to future events and the increasing nationalistic content, military capability and confrontational attitude to the west is not without purpose. State media is the primary medium to motivate nationalistic fervour, and crucial to preparing the population for future events such as political change, character assassination, and diverting attention away from growing socio economic problems.

While state media reports and political speeches present an image to the population of global respect for China's leadership and the nation's rising power and global influence, it also possible for ensuing external events to undermine the carefully crafted perceptions and expectations, making effective nationwide censorship crucial to success in maintaining the perception.

The foregoing reports and 60th anniversary events could suggest a leadership transition for 2012 and explain the increasing nationalistic rhetoric of potential leaders, and that in turn could imply a return to hard line authoritarian control on policymaking, and especially foreign policy.

China wants to continue polluting at a rate that substantially negates the benefits of emission reduction proposals of the west. The rate of China's proposed return to double-digit growth will push coal fuelled energy generation to levels that will obliterate its own carbon intensity targets.

In view of its increasing rhetoric, the CCP would lose considerable face if seen to be bowing to pressure from the west to reduce GHG emissions, and that won't happen. China's media and Beijing, proudly trumpet China's economic rise to double-digit growth and its influence on the global economy.

What if?

If that is indeed the case, then why undermine support for the technocrats who are responsible for that achievement? It is after all their ongoing expertise and achievements that can produce the wealth necessary for the CCP to achieve the goal of lifting its 800 million peasants out of poverty and continued economic growth.

On the other hand, if Beijing has been misleading both the domestic and global communities by cooking the books to hide unsustainable debt in the hope of a miracle short term global economic recovery, then China's economy could indeed be a fragile house of cards about to collapse under its debt burden, overcapacity and excess supply of commercial and housing property.

The increase in nationalistic rhetoric could in fact be preparing the population to accept the laying of blame for impending failure by the hardliners on the technocrats and a return of the old hard line regime to take over the reins and rescue the economy.

In the event of any indication of dissent, Beijing would resort to its strike hard policy with immediate and unrestrained use of military and police force with the secondary objective, to deter possible outside help. The severity of such action could push Beijing beyond the point of no return both domestically and internationally.

Those in the Zhongnanhai way have good reason for their growing paranoia.

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About the Author

Arthur Thomas is retired. He has extensive experience in the old Soviet, the new Russia, China, Central Asia and South East Asia.

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