Wednesday 23 June 2021
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China Doomsday Scenario: 20% Cut To Economy & A Naval Gauntlet

A full 20% of the declared Red Chinese economy is composed of exports. Though, in fact, the real figures may be even higher. Over 5% of this 20% is to America alone. Hypothetically, if America stops selling completely to China it will lose or impact 1% of its economy. But if it the other way around, it is 5% gone for China.

The emerging coalition of democracies, including most of Western Europe except Germany as it stands; India, Japan, South Korea, and several others in the South East Asian region are cutting back sharply on investment from, and trade with, China.

The oil exporting nations of West Asia and elsewhere are caught in a cleft stick because of the oil and gas glut, and cannot therefore oppose Chinese hegemony too blatantly.

The Chinese government mouthpiece, Global Times, says even its exports of rare earth, is down 30% already. Losing its place as the key link in the supply chain of the world is proving disastrous for Xi Jinping’s China. But it may already be too late to reverse this trend.

In addition to this economic roiling, China is in trouble on the seas. It can be stopped via satellite surveillance, submarine, mine and cruise missile if necessary from safely reaching its ports on its Eastern face fronting the Pacific.

The Pacific is patrolled and ruled by America from the end of WWII in concert with its allies. China, unfortunately does not have any maritime allies, and its navy is no match for America, NATO, and other allies.
And now, not only is the South China Sea being aggressively patrolled by the US and other navies; so are the Malacca Straits. These are both vital choke points. China is much more vulnerable on the high seas than ostensibly it is on land.

On land, China has at least undertaken quite a few battles over the last century, some of which it has even won. Most of them were localised and civil wars, between sides with similar levels of military sophistication. It has however never been in a naval battle at all since 1895, when it clashed with Japan. This resulted in the bulk of the Chinese fleet being sunk.

So today, China is an untested naval quantity, despite its ambitions to float a formidable blue-water navy to dominate the waterways of the world. The Americans are a tried and tested naval power by way of contrast.

Creating bridgehead ports at Djibouti, Sri Lanka, Chabahar , Gwadar and even ones in the Maldives and the Seychelles in prospect, is not going to be enough. China may want to dominate the Indian Ocean, but is unlikely to be allowed to do so. Besides, it does not bring goods and services intended for its eastern sea board any closer to dock.

It is the irony of geography that China cannot survive without servicing its eastern seaboard. The East of China is also its heartland, and the home of the dominant Han Chinese. Almost all other parts of China have been acquired by conquest and trickery in the not too distant past. Consequently, they are all restive, ethnically disparate, and none too cohesive.

Transporting goods, oil, gas, thousands of kilometres by land via Pakistan or by sea via the Straits of Hormuz from the Gulf or farther afield, is easier said than done. Nobody likes China in imperialist mode, and now that there is a collective forming, many are beginning to resist. Balochistan, for example, is is no mood to let the Chinese operate peacefully on its soil. Likewise, Afghanistan is pushing back against Chinese ally Pakistan.

China however wants to flout international laws and maritime conventions. For a long while it was allowed to get away with it. This may have misled it. But it is now being firmly resisted by all the powers that be. The small countries in the littoral of the South China Sea, Vietnam, the Philippines, and even Australia and New Zealand, that moves much of its tonnage through the South China Sea, are no longer on their own.

In effect, China may soon have to run the gauntlet across the powerful and practiced navies of the world. These include the US, Japanese, Australian, Indian, French and British navies. Russia, which has a very competent blue water navy, may not stand idly by if its interests are threatened
China cannot, in the hostile environment it has created, force its way through either the Malacca Straits or the South China Sea if America and its allies wish to prevent it. This can blockade its cargo ships and tankers and send them spinning through other tortuous routes and transhipments.
The still in formation Chinese Navy is no match for the combined capabilities of so many opposed to its hegemony.

India is also preparing hard to inflict a military defeat along the LaC particularly at Ladakh, and other hot spots where India is being menaced. It is also quite ready to fight a two-front war with Pakistan as necessary. Fortunately for India, the same broad coalition of powerful military nations including Israel, are in military and diplomatic support of the Indian position.

Can China withstand a military stand-off or defeat on land and sea as well as the punishment of its export economy? Somehow, the die seems to have been cast. It may be too late for the economic damage already, but the military consequences are still in the balance.

China may be hoping against hope that President Trump is defeated and replaced by President Biden in November. But even if that happens, the permanent interests of America against the recent Chinese bid to overthrow its primacy will not disappear. A new president will not surrender to Chinese bullying any more than the present one. The style may change, but the substance will not.

It is often speculated that the recent military aggression against so many countries including Taiwan, Japan, India, and economic threats against several more such as Britain, Australia, Canada is caused by China’s internal problems.

Sections of the Chinese Communist Party (CCP) underpinned by the Peoples’ Liberation Army(PLA) are unhappy with Xi Jinping’s leadership. The economic slowdown of the last few years is taking its toll. Growth rates from the double digits have plummeted to less than 6% per annum. There is massive unemployment and a mountain of bad debt.

The jingoism therefore is said to be an effort to distract the population. That Hong Kong has also been put under the CCP lash of late may also be to contain dissent and incipient rebellion from spreading to the mainland. However, the whole effort, both internally and externally, has been misjudged and clumsily handled.

It has been brought to a head by the global pandemic caused by the Wuhan Virus. There is a persistent feeling globally, that aspects of bio-warfare are now very much on the table from Red China. A recent pact with Pakistan to develop Anthrax and other bio-weapons jointly seems to confirm this perception.

This diabolical behaviour is the last straw that has broken the back of Chinese credibility. The world does not trust Red China any more. It does not wish to be dependent on it.

China is thought to be hiding the true facts on the Wuhan Laboratory where the man-made virus was apparently developed, and the millions of Chinese it has purportedly killed in the first wave. Despite this, there were no restrictions on its wilful export abroad, particularly to America and Europe.

What remains to be seen, now that the world has risen up against it, is whether China sees it is best to retreat from its quest for world domination. It is a spurious idea that is not acceptable to anyone.
If China does not lower the pitch of its ambition, it is headed for open conflict. It is a fight, despite its large and untested armed forces, it has no chance of winning. Real war is not a drill, as Chairman Mao may well have said. Certainly he knew that revolution was not a dinner party.

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Gautam Mukherjee
Commentator on political and economic affairs

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