The
World’s bully is under pressure and it does not like it.
President
Xi Jinping has been anointed one of the three “core” leaders of China along
with strongmen Mao and Deng giving him sweeping powers over the vast Chinese
Army and the politburo. President Trump has started to vacate the seat at the
centre of the head table of World politics as he focuses on America leaving
China to assume that they are the natural successors to this seat and therefore
the leader of the World.
The
Chinese spokespersons or their state run mediums threaten every world leader
who has the “audacity” to meet Dalai Lama. They do not like anyone who tries to
do business with Taiwan. President Xi’s recent threat on the 20th
anniversary of Hong Kong of “not crossing the red line” was alarming but Hong
Kong residents, knowing the consequences, silently accepted it. China has exhibited
its military power in the South China Seas and has claimed islands that do not
belong to it. They genuinely believe they have the right to protest against
anything they do not like but they are not willing to accept any protests
against their actions.
China
has done it all with absolutely no concern for what others may feel. But these
threats are now beginning to sound hollow. The sabre rattling is sounding
scratchy and tired.
“Either
you are with us or against us” is the policy followed by China and for the past
two decades most countries, eager to do business with this large market or keen
to get their investments, have complied in stoic silence.
But
all is not right with China. The Chinese economy, the reason for the arrogance
of its leaders and its spokespersons, is slowing down noticeably and dramatically.
Labour unrests are growing everywhere either because of unpaid wages, layoffs
in record numbers or because sufficient new jobs are not being created. The
population is ageing and, it has often been said, that China will grow old
before it gets rich.
The
debt of the country at US$ 25.6 trillion (one trillion equals 1000 billion) has
ballooned to 250% of gross domestic product leading most economists to voice
their concerns of an impending bubble bursting and tsunami waves of debt will
be felt all over the world. Unemployment, pegged at 4% by Government statistics
is believed to be at least three times this figure by Fathom Consulting. Forex
reserves has dropped from US$ 4 trillion in early 2014 to just over US$ 3
trillion in 2017. No one asks where this US$ 1 trillion has been spent in three
years.
China
needs a minimum growth rate of 7.4% to ensure that the Chinese citizens
continue to be gainfully employed. In a translucent society, where financial
numbers are suspect and statistics are “managed”, no one knows what the correct
position is in China leaving everyone to speculate. Huge infrastructure
projects are lying idle and ghost cities can be seen everywhere.
Chinese
investments all over the world are facing serious challenges. The port in Sri
Lanka is a financial disaster for Sri Lanka and China is taking 80% equity and
therefore opening up an opportunity to set up a naval base. Bridges are
collapsing in Kenya and infrastructure projects in Africa are either sub
standard or running behind schedule. The Pakistanis are questioning the China
Pakistan Economic Corridor as they are beginning to realise that the Chinese
have taken away promised jobs and the power plants promised are actually second
hand thermal power plants from China. Pakistanis now fear that they will become
another province of China but have to hang on to the only “all weather friend”
they think they have.
On
the political front, the love affair of China with USA is over. President Trump
has sold arms to Taiwan, violating China’s self-stated “one China policy” and
has refused to listen to the empty threats of China. If he goes ahead and
imposes tariffs on Chinese products, the famous sweatshops of China will go
into a tailspin. The South East Asian countries, overawed by the financial power
of China have started to understand the bully that China is and are hoping to
find another market before they can push back on the so-called largesse of
China.
Contrast
this to what is happening in India, a nation with more than two thirds of its
population under the age of 35. Indians now have a strong democratically
elected leader whose popularity continues to rise.
Prime
Minister Modi won a majority in Parliament and has, barring a couple of state elections,
consistently won with sweeping numbers. He has not hesitated in taking tough
decisions much to the chagrin of some of India’s hawkish neighbours. His tough
stand against Pakistan and India’s surgical strikes has been acknowledged with
respect.
The
Chinese have gotten used to a hesitant Indian leadership who have generally
tried to take the middle path against Chinese push backs. The recent Chinese incursion
into Doklam on the Bhutan border and Modi’s unwillingness to back down despite
the Chinese rhetoric has won him even more admirers both in India and outside. The
Chinese, used to getting their way everywhere, are unsure and making
meaningless threats.
Foreign
Direct Investment in India is at an all-time high. Demonetisation and the
introduction of GST has made the ruling party stronger. The stock market is at
an all-time high. The Indian economy is now the fastest growing in the world
and will continue this momentum for the at least next decade. And, Prime
Minister Modi is just getting started. He should easily lead his party to a
thumping majority in the parliamentary elections in 2019.
Mr
Modi’s whirlwind diplomacy in the last three years has won him many friends and
admirers. Unlike his Chinese counterpart, Modi knows how to connect with the
wealthy Indian diaspora. His ability to balance opposing groups around the
world has opened up economic opportunities for Indian businesses outside India
and for foreign businesses in India. Strong bonds with USA and Israel will help
India not only in getting more investments but also shore up our already strong
defence capability.
The
three decades starting in the early eighties belonged to China. The next three
decades, starting from 2014, definitely belong to India, now beginning to be
accepted as a super power in the world.
China
does not like being on the back foot but then does the World really care?
*******************
The author is the founder Chairman of
Guardian Pharmacies and the author of 5 best-selling books, Reboot. Reinvent.
Rewire: Managing Retirement in the 21st Century; The Corner Office; An Eye for
an Eye; The Buck Stops Here - Learnings of a #Startup Entrepreneur and The Buck
Stops Here – My Journey from a Manager to an Entrepreneur.
Twitter: @gargashutosh
Instagram: ashutoshgarg56
Blog: ashutoshgargin.wordpress.com |
ashutoshgarg56.blogspot.com
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