Friday 30 January 1998

China's Emerging Fault Lines Spell Trouble

(Originally appeared in the 1990s in the Times of India, as published in M. D. Nalapat's book "Indutva", Har-Anand Publications, 1999)

That the tune is called by the individual paying the piper is
demonstrated by the chorus of voices across the world defending
the Communist party’s rule in China. In the US, several former
secretaries of State are now on Beijing's payroll, usually through
Chinese or Southeast Asian companies linked to the Communist
party of China and its powerful offshoot, the People's Liberation
Army. While CCP-PLA fronts are rare in Singapore and Taiwan,
in Thailand, Indonesia and Malaysia many overseas Chinese
business persons have allowed themselves to enter into profitable
arrangements with CCP-PLA fronts.

Those involved in operations such as trafficking in drugs or
weapons are increasing. Entire governmental structures—such
as in China’s allies Myanmar and Pakistan—have developed
networks to ensure cultivation, processing and transport of
narcotics, with the profits being shared between them and their
hidden principals. It is one of life's ironies that a country that
suffered the most at the hands of opium traders now hosts
several individuals who are active in sending this and other
noxious substances to the US and the EU, the most lucrative

Thanks to the reality that in Pakistan, China and Myanmar,
the defence forces are above what little law exists, there are no
checks on the army vehicles used for transporting narcotics to
the China-Pakistan, Myanmar-Thailand and the China-Myanmar

The China lobby has cleverly equated the regime in Beijing
with the Chinese people, when the reality is that Jiang's men
have about as much sanction from the second as Mobutu had
from the people of Zaire. China is home to one of the great
cultures of the world, and despite the hell the country has gone
through, that tradition has remained. In interaction with the
Chinese people, whether in Singapore or in Shanghai, their
warmth and humanity are patent.

However, the years of Communist rule have created fault
lines, not within the Chinese people as such but within the ruling
structures. It is ·these fault lines that may trigger unstable
behaviour in the Chinese state. Even today, the leaders of the
CCP and the PLA who are in their 60s or 70s or even the late
50s—are much more moderate towards the external world than
some of their rhetoric would suggest.

It is no accident that the 1970s witnessed the emergence of
a policy of engagement with the capitalist world, chiefly the US.
The cadres who were in their 20s and 30s when the People's
Republic of China got established in 1949 were by the l970s in
their 40s and 50s. These cadres had seen the turmoil between
1949 and 1970, and wanted stable relations with the outside
world. They were in no mood for crusades, unlike cadres who
had spent their own formative years witnessing the "impossible"
feat of defeating Chiang Kai-Shek's armies, and who consequently
were in favour of "bolder" policies, as seen during the Korean
war or the conflict with India.

The post-1949 cadres got control in the 1970s over most of the
echelons that determine the chemistry and direction of policy. By
2001, cadres who were in their formative years during the 1960s
will begin to dominate the ruling structures in China. These are
likely to have attitudes vastly different from the present top
leadership, for two reasons. The first is the fact that they would
have cut their attitudinal teeth in the turmoil of the Great
Proletarian Cultural Revolution in the 1960s. The second is that
they would be the offspring of the One Child policy.

The Cultural Revolution cadres ran riot over established
structures, humiliating elders and peers with impunity. This
upheaval engendered in its participants a contempt for formal
laws and structures that has got manifested in today’s China,
where the "law" is often what the local party boss wants it to be.
Once such a regulatory vacuum gets established, it is difficult to
shake off in the absence of democracy. And unless laws are
placed above the persons who administer them, there is likely to
grow an arrogance of power among those in high office.

This lack of protection by laws—as distinct from individuals—
is what makes investment in China an act of faith. In certain
circumstances, of economic slowdown affecting investment and
exports, the cadres may regard expropriation to be more profitable
than forbearance. In the "Cultural Revolution" psychology, even
unreasonable blows against an opponent are justified.
Apart from such a mindset, bred in the turmoil of the 1960s,
another factor that merits attention in China is the psychology
generated by the One Child policy. Many of these single
children—especially males—have grown into overconfident
adults intent on getting their own way, and liable to get nasty
when they don’t. Today such individuals have begun to permeate
the ruling structures in China, with their aggressive attitudes

So long as the going is profitable business-wise, such cadres
will remain in line. However, two tendencies are operating that
may bring hard times for the Chinese Communist party's Red
czars. The first is the battering of stocks in the region. Many of
the shares that have seen their values plummet are those in
which the top cadres have, directly or through fronts, made
major investments. The cadres may view this not as a market
reaction, but as a conspiracy against them, and move closer to
the retaliation mode.

The second downpull factor for Beijing is the emergence of
India. The China lobby in New Delhi has been working hard to
make the subcontinent an unattractive destination for investment,
by pushing for restrictive laws and by encouraging PILs and
agitations against major projects. However, the fact remains that
India is almost as big a market as China, and indeed a much
better one for the skills needed to compete internationally.

Just as China has been cutting away at lower-value producers
in Southeast Asia, soon India may take away markets from
Beijing. This will see fresh roiling within the cadres. The fault
lines sketched above—the emergence to high office of cadres
having a combination of the One Child and the Cultural
Revolution mindset—may in future generate more adventurist
policies from Beijing. Such policies will find a fertile atmosphere
in the incestuous intrigue characteristic of non—democratic
bureaucracies. It is not the present top leadership of China that
India and South—east Asia need to worry about, but the generation
that in the coming decade will replace them, If the 1970s
represented a fire-break in the psychology of the cadres that ruled
the People's Republic, the next decade may see another, this time
not so benign.

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