China’s Strategic Ambitions and America’s Achilles Heel Exposed

Despite repeated failures, Americans believe that those who become familiar with their way of life, with their capitalism, will certainly want more of it and forever. It is, therefore, a matter of time for all other societies, civilizations and cultures to give up and shout for all things American, including American-style capitalism, its democracy and culture. Samuel Huntington emphasized in his 1996 book, clash of civilizations, that modernization was not the same as Westernization, or Americanization for that matter. Many other cultures may prefer to modernize without westernizing themselves. Apparently, neither Washington DC nor New York has read his book.

About a year ago, you actually wrote in these pages (bit.ly/3BX8Fd0) that the best insurance against China’s success was Beijing. Similarly, it can be said that the greatest threat to America’s superpower status is the American elite and their interests. No one can exemplify this better than Wall Street. Non-financial businesses in the US are also not far behind. An essay written by Cai Xia and released by the Hoover Institution (hvr.co/3A5M7q0) on the occasion of the centenary celebrations of the Chinese Communist Party contains several memorable lines. One of them is this: “China must deceive the West by hiding its long-term strategic goals, while waiting for opportunity, pretending to be weak and harmless, to take advantage of Western markets, technology, capital and talent.” Strike back and win the final war. This was an ancient strategy that Chinese kings and emperors used many times in the past.” That’s what “hide your strengths and spend your time” means. China thinks the time has come. It started operating like this in 2008, and Wall Street should be thankful for that. It remains China’s trump card. In general, American businesses, it seems, don’t get (or maybe care) this.

Thus, while geopolitically, China has the scale of the US, it has begun the other part of its game plan as well. That is, moving towards ‘shared prosperity’. In other words, increasing the economic pie is now complete. The redistribution of the pie is Beijing’s new policy objective.

At the same time the cultural remnants of capitalism will also be purified. China tolerated visible manifestations of American culture as long as it felt the economic benefits outweighed the costs. With American capitalists and policy makers showing neither the will nor the stomach to reform their capitalism, China has rightly concluded that it must act before it is too late. Hence its recent ban on gaming and entertainment shows.

On Sunday, friends in the neighborhood were mulling over gaming for up to three hours per week, citing China’s restrictions. He realized that children elsewhere in their adult years would be walking around like zombies, seeing how much screen time spoils their brains, while Chinese children would grow up to be healthy and intellectually active adults. Whether it’s a natural exaggeration of parents here, Beijing’s recent introduction of private tutoring as a non-profit activity and its ban on gaming has struck a chord in India, and it should be welcomed. can. The fact that they are seen as the right thing to do confirms to us that, given a long rope, the capitalists are seen first to hang society. In the Indian context, readers should recall an article written two weeks ago in this space on Packaged Food Labeling in India (bit.ly/391dfdF).

We can think of the pursuit of ‘general prosperity’ and the purification of the ugly elements of capitalism as a ‘third way’. The country went on the communist path and failed. Countries went the capitalist route and are now busy self-destruction with their addiction to free money. But a third way exists. Use capitalism to create prosperity and then move on to socialism to distribute the spoils. Thus China has a great experiment whose results may (or may not) show the way to the rest of the world.

So is the time right? China thinks so, but there are reasons to doubt it. There is a debt burden. After 2005, China could not completely escape the temptation of debt to spur economic growth. Service and debt repayment will require development. Of course, China could officially back away from paying off the debt, but we don’t know how this will play out for domestic finances, even if resistance is rejected or suppressed. Second, won’t its war against cultural collapse rob Chinese entrepreneurs of their creativity and imagination? Third, given these two risks to the strategy China is pursuing, can it find answers to its development in making the South China Sea its own sea? In firmly reconnecting Taiwan with the mainland and expanding its Belt and Road Initiative?

Interesting times lie ahead, but also troubling times, given the lack of American will.

V. Ananth Nageswaran is a member of the Economic Advisory Council to the Prime Minister. These are the personal views of the author.