India’s Taiwan gamble and Xi Jinping's legacy

Come May 22, India will assume the lead position at the first meeting of the WHO executive board at World Health Assembly conference. Being the first global congregation of WHO after the outbreak of COVID-19, this event has for obvious reasons garnered great significance. For India, along with curating a global response to the pandemic, what has become a bigger policy question is whether or not to include Taiwan in the executive body. 

The relentless pursuance of US and Australia in the matter has put India under the spot. Its decision, hence, will determine the ability of the “anti-China” lobby to achieve anything beyond bold press statements. It is among the first attempts of a collective global response to stop the Chinese juggernaut, it has become all the more important.

For Xi personally, if there’s any perceived cult deficit between himself and Mao, the outcome may either plug it or put a permanent dent on his carefully cultivated legacy. Aspects shadowing Xi’s political future forms the focus of this article.

Despite Xi’s strong anti-corruption drive, efforts to modernise the army and further integrate China into the global supply chain, his Presidency has been less than convincing given a host of issues that have propped up since his ascent to the top post.

China’s continuous dip in the economic growth rate since 2013 is a telling story. In 2019, even before the pandemic hit the Chinese economy, the country’s GDP grew at 6.1 per cent, the slowest rate of economic growth since 1990. Last year, it recorded its lowest industrial output since 2002. The COVID-19 has accelerated this decline and the unemployment rate, consequently, has seen a steady increase.

The official figures put unemployment rates at 6.2 per cent but private research reports cite a far higher number. One such report put the real jobless rate at 20.5 per cent with 70 million unemployed, while another suggested that the pandemic may have pushed 205 million Chinese workers into uncertain employment. 

Chinese social media provides an insight into growing resentment among the Chinese against the party leadership. On Douyin, China’s version of Tiktok, The Internationale - a left-wing anthem known for workers’ movement has become widely used background music, highlighting growing displeasure in the worker class.

The Belt and Road Initiative, Xi’s flagship program, has run into various troubles within the first decade. As of the second quarter of 2018, China’s non-performing assets in the BRI had reached $101.8 billion, and reports suggest at least $ 200 billion of lendings that are not on paper. Some of the investments have turned out to be outright foolish with seemingly no plan for recovery of the invested money. Take for instance the rail network spanning tens of thousands of kilometres connecting China to far European cities. 

Xi has incentivised the local governments to create bubbles of ever-flourishing railway demand while in reality most of these trains run empty to Europe and back. The neglect of economics is such that even cities on the east, having easy access to ports have joined the Eurasian rail network. With diplomatic relations with Europe at their worst, an increasing number of nations reconsidering their involvement in BRI, failure stories in pivotal areas, and ever-growing debt on Chinese central banks, Xi’s ‘legacy’ initiative has set itself for eventual death. 

To add to the economic nightmare Xi has found himself in, corporations from across the world are trying to shift their bases outside of China. Reports have emerged that Indian state of Uttar Pradesh is in touch with at least 100 US companies looking to move out of China. German footwear company Von Wellx has already shifted entire production from China to India. China’s contemporaries, like India, have embarked on a reforms spree, while few federal governments, like Japan, have announced assistance packages to companies leaving China. 

Domestically, the Chinese companies are either laying off employees or new recruitments have tanked post the outbreak of the pandemic. In the first quarter of 2020, the recruitment postings across all industries fell 22.6  per cent compared with the same period last year. A survey found that 5.4 per cent of tech firms experienced job cuts while 12.9 per cent have reduced contractors, interns and part-time employees. The situation further buttresses angst breeding in the common populace against Xi’s handling of the pandemic.

The pandemic has thus cast an unmissable doubt in the attractiveness of China as an investment destination. 

When such headwinds against the Chinese juggernaut are coming with seemingly no end, India has found itself with a brilliant opportunity to make a statement. India must shed its habit of doing balancing acts and bite the bullet by including Taiwan in the WHO body.

For Xi’s opponents, his failure to stop, or worse, creating an environment that allows the world to hand a major blow to the “One-China” principle will become the talking point. His political position as such has no immediate threat since the 2018 CCP Congress amended the constitution to remove term limits on Presidency, but the cult that is cultivated in the form of “Xi Jinping thought”, the “Papa Xi” image will surely take a hit.

Eroding social harmony between local governments as seen during clashes that took place during the opening of provincial borders between Hubei and Jiujiang, simmering secessionist voices as seen during the Hong Kong clashes, rising tensions in the South China Sea with US flying bomber aircraft over the disputed region, and to top it all, the unique soft corner that Taiwanese rights have found with world leaders, have all put an ageing Xi in a vulnerable position. 

Taiwan's inclusion will forever subdue Xi’s supremacy within CCP and for the world, it may be the beginning of a new world order with India’s place right at the centre. Given China’s own indulgence in matters relating to Kashmir, be it blocking resolutions at the UN or disregarding India’s sovereignty in Gilgit- Baltistan, it remains to be seen if India has developed the appetite to craft what would be a defining moment in this fight against the Chinese hegemony. 

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)