No economy can be built on deceit! The Chinese leadership, President Xi Jinping in particular, forgot this important lesson of history. Their game plan was exposed by Covid. The last few editions of the Pew Research approval survey revealed that global trust in the country is eroding rapidly.
The mood is captured by the recent joint statement by the American and British security agencies – FBI and MI5 – warning businesses of the dangers of doing business with and/or in China. This is an antithesis of the global optimism during the opening up of China four decades ago.
The root of the problem lies in the absence of democracy. Back in 1978, the Chinese Communist Party or CCP promised to create a “socialist market economy.” In reality, the regime introduced one of the cruelest forms of capitalism, epitomized by the Barbie doll economics, under the protection of single-party rule.
Over the next three decades, China established steady growth and marked improvement in living standards. That doesn’t mean though that everything was moving in the right direction.
There were issues with human rights. Tiananmen tragedy took place in 1989. There was a massive onslaught on Tibetans, the last being in 2008, just before the Beijing Olympics. Not many knew what was happening to Uighur Muslims till then.The access to information on the Chinese economy was limited. Finance, the most critical factor in business efficiency, was extremely opaque; thereby denying the outside world the opportunity to know the nature and extent of state subsidies.
Yet, the world wanted to trust China due to a combination of political and economic reasons. Back in the 1970s, the US-led NATO powers were convinced that mainstreaming of China would weaken Soviet Russia-led communist block which eventually collapsed in the early 1990s.
By 2001, when China became a member of the World Trade Organisation (WTO); the western powers, Europe in particular, were sold out to the theory of globalization. The general expectation was Beijing would fire the global growth by producing manufactured items at the least cost and, the developed world would concentrate on technology.
The trouble started in the very next decade when allegations started surfacing about technology theft and forceful cornering of the marketplace using state subsidies. By 2012 – when President Xi, rose to the power – the US Congress became watchful of Chinese ambitions. Yet, everyone wanted to trust the Chinese leadership.
But President Xi thought otherwise. As a single-party ruled state, Chinese citizens never had freedom of speech to the levels enjoyed in the democratic world. However, between 1978 and 2012 the CCP had visibly relaxed its iron grip.
As in 2012, discussion on social issues, failure in governance, and corruption – was common on Chinese social media, Weibo. By this time many Chinese companies – like Jack Ma’s Ant Group – built vast empires outside China which required conforming to global norms. It was, therefore, normal that they enjoyed freedom in operation.
Xi changed everything and broke every status quo in and outside China. He started with the centralization of power and curbing freedom of speech. Repeated crackdowns on social media sent citizens running for cover. Cracking down on Muslim Uighurs in Xinjiang and some other ethnic tribes were part of this agenda.
Next, he went after businesses. The private sector was asked to make room for CCP nominees at the top management. They would work as state agents. The prolific Jack Ma was sized up. A set of new laws curbed the freedom of even foreign investors.
With the country turned into an ‘open jail’; Xi went out to expand China’s control in foreign geographies with his One Belt One Road (2013), later renamed as Belt and Road Initiative (BRI).Chinese banks opened their money bags to buy out smaller nations, on behalf of Beijing, in the name of infrastructure building. Over the last decade countries in Asia and Africa lost control over rail lines, ports etc. Such glaring colonization economic invasion and colonization were unprecedented after World War II.
But the worst of the lot was his ‘Made in China 2025’ and interference in policy making in foreign economies. Made in China initiative gave free hand to China’s Ministry of State Security (MSS) to steal technologies from corporates and research institutes.
General Ken McCullum, director of MI5 gave a detailed account of how MSS uses Chinese scientists, students, and business enterprises to infiltrate into global institutions and corporates to steal researched outputs be it on Covid or aerospace technology.Professional social networking sites are used to lure the scientific communities of the world into divulging details. Chinese businesses floated from China or elsewhere work as MSS fronts to enter business deals with target companies and suck out information. State- sponsored hacking army adds to the initiative.USA and UK are now weeding out such elements from their system. But the job is made difficult by plants in the policymaking body. MI5 raised alerts in the past that some of the British MPs were compromised and acting as moles.
Other countries are yet to raise such alerts. This is partly because they don’t have as strong institutions as MI5. But it is a common guess that China is pursuing moneybag politics and has been planting its moles in the highest policymaking bodies in the countries of interest.
The modus operandi might remind the lay reader about the Cold War era and the James Bond movies but that’s a trivialization of the risk the world is facing from China.
The Soviet Union was a closed economy. It was created on the back of military power. To date Russian economy is weak. They survive on the export of military hardware and energy commodities.
China is playing a far more dangerous game. They are faking to be an open economy, which they are not. They are sharing the same global economic space along with the democratic world and enjoying every benefit of the UN and WTO system to trick the world.
They reintroduced the concept of colonization. They are deceiving their identity and stealing the most precious resources, intellectual property, of the modern world. Right now, they are circumventing the world. They will act militarily at the opportune moment to take ground control.
The world should be thankful to the pandemic to expose Beijing’s plan behind cornering the supply chain. It is now time to up the ante.