China needs to seriously think whether it wants to continue the confrontation with India or settle the border with irrevocable guarantees, writes Lt Gen P.C. Katoch (retd) for South Asia Monitor
It is clear that Russia was forced to invade Ukraine because of the American plan to weaken Russian economy, defense potential and balkanize it; NATO expansion to Russian borders and ignoring protests by President Vladimir Putin of existential threats to Moscow’s security were deliberate. Contrary to American propaganda, Russia is winning in Ukraine.
US President Joe Biden boasted that “Russians are cut off from the modern world” but the plan to wean Europe away from Russian oil and gas has floundered. The EU is still importing $1.1 billion worth oil and gas daily from Russia. Japan buys 60 percent output from Russia’s Sakhalin-2 project. America is actively wooing Iran and Venezuela, both of which have been under US sanctions for the past several years. However, freezing $630 billion in Russia’s Central Bank, cutting off Russia from the SWIFT system and sanctions adversely affects the Russian economy.
The Chinese statement post the March 18 video conference between Chinese President Xi Jinping and Biden quoted the latter as saying that America does not want a new Cold War with China, doesn’t aim to change China’s system and revitalization of America’s alliances doesn’t target China.
But the targeting of China has already begun.
Canadian Prime Minister Justin Trudeau visiting the European Parliament was told he is a “disgrace to any democracy” since he admires China among other things. This, despite China being the second largest partner for EU goods exports of and the largest partner for EU goods imports in 2021.
Dependence on China
There is no denying that the US heavily depends on China for goods. According to the 2021 Global Imports Report, China is the leading maritime importer for the US; accounting for 42 percent of all goods shipped to the US. China not only sends far more products in general to the US than any other country, it also leads every category of imported goods, from textiles to plastics to metals and beyond. China increases the volume of goods it sends to the US nearly every year by hundreds of thousands of units. China also accounts for over 95 percent of the world's production of rare earths.
Christopher Balding, specialist in Chinese economy at the Henry Jackson Society (UK), says that the world could begin to see a “significant shift away from China” as companies and governments reevaluate their business ties in the aftermath of the Russia-Ukraine conflict. Outrage over China’s repressive campaigns in Xinjiang, Hong Kong, and elsewhere has also spurred calls for international businesses to unplug from China.
On March 17, Senator Rick Scott sent an open letter to business leaders commending them for ceasing operations in Russia and urging them to replicate a similar approach in China. “No respectable organization in the US should be doing business with a murderous regime. Every dollar spent in communist China supports its economy and Xi’s genocidal government.”
Concurrently, Republican Diana Harshbarger, US representative for Tennessee, said: “China is an adversarial nation, and we’re relying on them for 90 percent of our medications or active pharmaceutical ingredients and our finished products. We need to make those things in America or use our allies.”
US-China conflict inevitable
Admittedly, Western economies decoupling from China cannot happen overnight but Beijing should note what Russia has been being subjected to: funds frozen in Russia’s Central Bank; SWIFT delinked – dollar weaponized; unsuccessful hack of Russia’s space control center to shut losing control of satellites; Internet weaponized and media companies sanctioning Russia; Switzerland (supposedly neutral country) froze all Russian money in Swiss banks; almost all high-tech companies in America and the West sanctioned Russia and supported Ukraine; massive propaganda psyched entire West against Russia, and; sanctions in every conceivable field.
China should be ready for the above and much more. As of October 2021, China owned $1.065 trillion of US Treasury securities, or about 3.68 percent of the $28.9 trillion US national debt. Beijing should realize even US Treasury bonds purchased by China will be frozen in a US-China clash – call it economic terrorism by America’s Global Autocracy or whatever.
In the race to dominate the world, US-China conflict is inevitable in whatever form and whichever timeframe. Blowback from the US-Russia conflict over Ukraine on American-European economies together with alternative trading systems being built by nations and depreciation of the dollar, which according to the IMF has already lost ground in its share of international currency reserves, could trigger the clash.
Onus on Beijing
In the above setting, China needs to seriously think about whether it wants to continue the confrontation with India or settle the border with irrevocable guarantees in the interest of Asian solidarity. The guarantees must be foolproof because China’s credibility is as low as the US or perhaps worse.
Chinese Foreign Minister Wang Yi was in India recently – perhaps exploring whether India will participate in the BRICS summit being hosted by China later this year and seeking views on multilateralism.
On returning to Beijing, Wang said that during his visit to India, he “keenly felt” both countries are not a threat to each other, can handle and manage differences, and should help rather than undercut each other.
In New Delhi Wang said “border issues” should not be allowed to affect the overall development of ties. Apparently, Wang has little understanding of Indian democracy and the Indian psyche. As the West breathes down Beijing’s neck, it is for China to roll back its 2020 invasion of Ladakh and settle the border with India in China’s larger interest.
(The author is an Indian Army veteran. Views are personal.)